Crystallizer CapEx/MGD

Transcription

1 S-43 Technical Memorandum To: File From: Bryan Oakley, Alison Ling Subject: Updates and Correction for Appendix C Membrane Costs Date: April 25, 2017 Project: MMB c: Dale Finnesgaard, Don Richard, Lisa Andrews This memorandum addresses the April 15, request from Scott Kyser, MPCA. Scott requested equations used to calculate membrane and evaporator crystallizer costs in the February 10, 2017 MMB Engineering Cost Analysis report. Figure C-4 in the report does not represent calculations used for evaporator/crystallizer costs in the final report. Figure C-4 will be replaced with the following figure which is representative of the equations used to calculate the evaporator/crystallizer costs: Crystallizer CapEx/MGD $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 This Estimate (Evap/Cryst) This Estimate (Evap Only) $50,000,000 $ MGD to Crystallizer Mackey Model Evap only (2014 $) wq-rule4-15u Barr Engineering Co MarketPointe Drive, Suite 200, Minneapolis, MN

2 To: File From: Bryan Oakley, Alison Ling Subject: Updates and Correction for Appendix C Membrane Costs Date: April 25, 2017 Page: 2 S-43 Evaporator/crystallizer and membrane cost estimates presented in the report were calculated with the following equation: EEEEEEEEEEEEEEEEEE CCCCEEEEEECCCC CCCCCCCC (pppppp MMMMMM) = AA QQ QQ BB 1 + QQ 0.4 QQ Where, Q = flow to process (mgd) Q = reference flow A = scaling cost ($) B = baseline cost ($) RO NF E/C (Q<100 gpm) E/C (Q>100 gpm) Q A $1,165,700 $1,155,700 $6,000,000 $15,000,000 B $75,700 $65,700 $238,200 $505,500 This equation will not be included in the report. P:\Mpls\23 MN\62\ Cost Analysis of Water Quality\WorkFiles\Cost Estimating Team\Treatment Technologies\RO and EvapCryst Costs\RO-NF-EC cost equation.docx

3 Variance Addendum NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Stations SD026 and SD033 Prepared for Cliffs Erie LLC December 10, 2012

4 Variance Addendum NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Stations SD026 and SD033 Prepared for Cliffs Erie LLC December 10, West Superior Street Duluth, MN Phone: (218) Fax: (218)

5 Cliffs Erie Hoyt Lakes Mining Area Variance Addendum NPDES/SDS Permit Renewal Permit No. MN December 10, 2012 Table of Contents 1.0 ntroduction Financial nformation Updated SD033 mplementation Schedule SD026 Variance Application (Updated) SD033 Variance Application (Updated)... 7 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx i

6 1.0 ntroduction This document is an addendum to Section 2.0 Request for Variance of the document titled Hoyt Lakes Mine Area NPDES/SDS Permit Supplemental nformation and Request for Variance as submitted to the Minnesota Pollution Control Agency (MPCA) on April 3, Based on subsequent discussions and correspondence with the MPCA, this addendum contains additional financial information; an implementation schedule for SD033; an updated version of the request for variance for surface discharge station SD026; and an updated version of the request for variance for surface discharge station SD033. The original requests for variance and these associated updates are based upon the guidance document titled Guidance to MPCA Staff for Assessing Variance Request from Water Quality Standards and Associated Effluent Limits by ndustrial and Municipal NPDES Permit Applicants. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 1

7 2.0 Financial nformation The following is an explanation of why only the financial information associated with the sole NPDES permittee of the Hoyt Lakes Mine Area, Cliffs Erie LLC, is relevant related to this request for variance. n reviewing a request for a variance, the MPCA is constrained to consider the economic burden on the responsible person seeking the variance. Here that responsible person is Cliffs Erie L.L.C. ( CE ), the sole permittee under the NPDES permits. CE is a limited liability company duly organized under Delaware state law and is registered to do business in the State of Minnesota with the Minnesota Secretary of State. As such CE is a person under Minnesota law just as if it were a Minnesota limited liability company, corporation, or natural person. MNN. STAT. 322B.90. As a limited liability company it is a person under Minnesota law. MNN. STAT subd. 10. CE became the sole permittee on October 23, 2001, when it received the approval of the United States Bankruptcy Court of the Northern District of Ohio, Eastern Division and closed on its agreement with the bankruptcy estate of LTV Steel Mining Company, nc. ( LTVSMC ) to purchase most of the assets and assume certain of the liabilities of LTV Steel Mining Company located in Minnesota. At the time of this acquisition, CE had negotiated with the State of Minnesota and various of its agencies to approve and support this acquisition in the Bankruptcy Court. These negotiations led to the execution of an agreement between and among the State Of Minnesota, Minnesota ron Range Resources And Rehabilitation, Minnesota Department Of Natural Resources, Minnesota Pollution Control Agency, Minnesota Department Of Revenue, Cliffs Erie L.L.C., Cleveland-Cliffs nc, Minnesota Power, Rainy River Energy Corporation Taconite Harbor, LTV Steel Mining Company and LTV Steel Company, nc. This Agreement is known as the State Master Agreement. Under the terms of the State Master Agreement it was agreed that CE would become the sole permittee under both the NPDES permits and essentially all other permits that had been issued to LTVSMC. n lieu of posting a bond or a letter of credit or some other form of financial assurance in order to give comfort to the State that it would perform all of its obligations under the permits, CE offered, and the State and its agencies accepted, a corporate guaranty from CE's ultimate parent company Cleveland-Cliffs nc. (now Cliffs Natural Resources and referred to hereafter as Cliffs ). P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 2

8 Although it was proposed by the State during the negotiations leading up to the State Master Agreement that Cliffs be added as a co-permittee on all of the LTVSMC permits, this step was not agreed to by CE and only the corporate guaranty by Cliffs was ultimately provided to the State and its agencies. Moreover, there is no language in the guaranty that states that Cliffs agreed to become a permittee under any permit. nstead, Cliffs merely agreed to meet the obligations and liabilities of CE when they become due, if and when CE failed to perform or pay those obligations and liabilities according to their terms. Thus, this instrument does not make Cliffs a permittee or responsible person under the statute. t is clearly only a form of financial assurance, akin to a bond or letter of credit, not an assumption of the permit obligations themselves. Thus, CE believes that in the context of this variance it is only its own financial condition that is relevant to the variance request, not that of Cliffs or any other entity. Just as the MPCA would ignore the assets and income of the bonding company, had a bond been posted as financial assurance, or the assets and income of a bank, had a letter of credit been posted, CE believes that the financial condition of the corporate guarantor is irrelevant when evaluating the financial impact of not granting a variance. CE knows of no case where the financial condition of a corporate guarantor, a bonding company or a letter of credit issuer has been deemed relevant in this context. t has also been decided in Minnesota that it is beyond the power of the MPCA to simply add Cliffs as another permittee so as to be able to base its variance determination on the financial condition of Cliffs rather than CE. The Minnesota Court of Appeals rejected that approach as beyond the statutory power of the agency and in violation of the rights to due process of the permittee and its ultimate owners. n re Hibbing Taconite Co., 431 N.W.2d 885, 890 (Minn. Ct. App. 1988). The Court of Appeals further ruled in that case that a separate parent corporation does not come under the definition of the person referred to in MNN. STAT subd. 10.; n re Hibbing Taconite Co., 431 N.W.2d at 893. Therefore, this application contains only financial information about the permittee, Cliffs Erie L.L.C APM P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 3

9 3.0 Updated SD033 mplementation Schedule As included in CE s November 29, 2012 letter to the MPCA, RE: April 6, 2010, Cliffs Erie, LLC Consent Decree Response to October 31, 2012 MPCA Letter ( Review of Response to July 25, 2012 MPCA Letter), the following are milestone schedules for conducting the evaluations of passive treatment technologies at SD033, including revised schedules for the source isolation and floating wetlands technologies. The starting date of these schedules will begin in the 4 th quarter of 2012 upon the MPCA s approval of the schedules. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 4

10 Proposed Schedule for SD033 Passive Treatment Testing NPDES/SDS Permit No. MN Prepared for Cliffs Erie LLC and PolyMet Mining nc. S-44 November 29, 2012 Revision Permeable Reactive Barrier (PRB), to begin Q4, 2012 Months from milestone: Pre-mplementation Field Studies 1 Pre-mplementation Studies Report & Pilot Testing Plan Agency review and acceptance Construct (Demonstration-Scale) Pilot Test 1,3 c c Monitor (Demonstration-Scale) Pilot Test 4 Submit Pilot Test Report and Recommendations Agency review and acceptance Design/optimize selected system Agency review of design Construction/optimization of system 1, 3 c c c c System construction substantially complete 2 Source solation, to begin Q4, 2012 Months from milestone: Field Sampling Plan for Pre-mplementation Studies Pre-mplementation Field Studies 1 Pre-mplementation Studies Report & Pilot Testing Plan Agency review and acceptance Construct Pilot Test 1, 3 c c Monitor Pilot Test 4 Pilot Test Report and Recommendations Agency review and acceptance Design Cover System Agency review of design Construction of system 1, 3 c c c c System construction substantially complete 2 Sulfate-Reducing Bioreactor; to begin Q4, 2012 (Clearwater Layline) Months from milestone: Refine Pilot Testing Plan / Equipment Procurement nitial 4-bioreactor Test 1, 3 Construct and Monitor Pilot Test 4 Pilot Test Report and Recommendations Agency review and acceptance Design of selected system Agency review of design Construction of system 1, 3 c c c c System construction substantially complete Floating Wetland, to begin Q4, 2012, in the event that the Sulfate-Reducing Bioreactor is not approved as an acceptable substitute under the Consent Decree. Months from milestone: Field Sampling Plan for Pre-mplementation Studies Pre-mplementation Field Studies 1 Pre-mplementation Studies Report & Pilot Testing Plan Agency review and acceptance Construct Pilot Test 1, 3 c Monitor Pilot Test 4 c Pilot Test Report and Recommendations Agency review and acceptance Design of selected system Agency review of design Construction of system 1, 3 c c c c System construction substantially complete Notes: 1. Start date for activity may vary depending on seasonal field restrictions 2. Construction for this mitigation alternative (if selected) may be a multi-year program. This completion milestone applies only to the first construction season. 3. Dependent upon reciept of appropriate permits and agency approvals. 4. Progression and ultimate duration of this activity is dependent on the acquisition of sufficient data derived from pilot testing. Agency Review and Approval Step P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\Long_Term_Mitigation\SD_033\mplementation Schedule SD033.xlsx

11 4.0 SD026 Variance Application (Updated) P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 6

12 Variance Application NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD026 Prepared for Cliffs Erie LLC April 2012 Updated: December 10, 2012

13 Variance Application NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD026 Prepared for Cliffs Erie LLC April 2012 Updated: December 10, West Superior Street Duluth, MN Phone: (218) Fax: (218)

14 Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD026 Variance Application NPDES/SDS Permit Renewal Permit No. MN April 2012 Updated: December 10, 2012 Table of Contents 1.0 Variance Application Minn. Rule Part , Subp Name and Address of the Applicant Signature of the Applicant Description of Facility for which Variance is being Sought Nature of the Variance Sought Parameters for which Variance is Requested Period of Time for which Variance is Requested Reasons Relied upon by the Applicant in Requesting the Variance Economic Burden Technological Feasibility Other Data or nformation Required by Rule or Standard Other Relevant Data or nformation Required by Agency General Description of Materials Discharged, Nature of Materials and Proposed Methods for Control Proposed Plan to Reduce Emission Levels to Lowest Possible Effect on Air, Water and Land Resources which will Result from Approval of Variance Statement of Alternatives to Proposed Operation which have been Considered Effects from Denial of Variance Variance Requirements Relative to Minn. Rule Part and United States Environmental Protection Agency (EPA) Facility Specific Variance Application References P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx i

15 List of Tables Table 1 SD026 Parameters of Concern Water Quality Summary (2005 through 2011)... 2 Table 2 Effectiveness, mplementation, and Cost nformation for Potential Treatment Technologies at SD Table 3 SD026 Proposed nterim Period Limits Table 4 Relative Salt Tolerance of Various Cultivated Plants* Table 1 SD026 Parameters of Concern Water Quality Summary (2005 through 2011)... 2 Table 2 SD026 Proposed nterim Period Limits Table 3 Relative Salt Tolerance of Various Cultivated Plants* 18 List of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 General Site Layout SD026 SD026 onic Composition Water Quality Data: Bicarbonate Water Quality Data: Hardness, Total Water Quality Data: Specific Conductance Water Quality Data: Total Dissolved Solids List of Appendices Appendix A Appendix B EPA Facility Specific Standard Variance Data Sheet EPA nterim Economic Guidance Worksheets: Worksheet A: Pollution Control Project Summary nformation Worksheet G: Calculation of Total Annualized Project Costs Data Needed to Calculate the Primary and Secondary ndicators (for Worksheets H,, J, K, and L) Worksheet H: Calculation of Earnings before Taxes with and without Pollution Control Projects Costs Worksheet : Worksheet J: Calculation of Profit Rates with and without Pollution Control Project Costs Calculation of the Current Ratio Worksheet K: Calculation of the Beaver s Ratio Worksheet L: Debt to Equity Ratio Financial Analysis Summary Worksheet N: Factors to Consider in Making a Determination of Widespread Social and Economic mpacts P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx ii

16 Appendix C Summary: Comprehensive Review of Potential Treatment Technologies for SD026 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx iii

17 1.0 Variance Application The Hoyt Lakes Mine Area is an inactive open pit taconite mine located north of Hoyt Lakes, Minnesota and adjacent to the Hoyt Lakes Tailings Basin Area. Discharges from the Mine Area are administered under Minnesota Pollution Control Agency (MPCA) National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit MN (Permit). The Permit is currently held by Cliffs Erie LLC (CE). The current Permit was issued May 4, 2001, expired November 30, 2005, and was last modified on May 6, n accordance with Chapter of the Permit, a complete NPDES permit application was submitted to the MPCA on February 28, While there are other discharges/outfalls authorized under the Permit, this variance application is specific to the surface discharge station designated as SD026. Station SD026 is a culvert which conveys Second (aka Knox) Creek under Dunka Road and is located approximately 1,500 feet downstream from the groundwater seep that forms the headwaters of Second Creek. The water discharged through SD026 consists of both groundwater seepage (which likely originates in part from Cell 1E of the Hoyt Lakes Tailings Basin) and stormwater runoff (from the area between the railroad embankment and Dunka Road). Second Creek is a tributary of the Partridge River within the Lake Superior watershed and is an unlisted water and as such, has the default beneficial use classifications of 2B, 3C, 4A, 4B, 5, and 6, as described in Minnesota Rule Chapter The parameters discussed in this variance application are total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance (parameters of concern). The current Permit requires monitoring at SD026 for TDS, bicarbonates, and specific conductance; however, of these three parameters only specific conductance has a corresponding effluent limit (1,000 µmhos/cm). Monitoring is also required for carbonate hardness (as CaCO 3 ) in the current Permit, although there is no applicable water quality standard. While monitoring for total hardness (Ca + Mg as CaCO 3 ) is not required for SD026 under the current Permit, monitoring for this parameter has been conducted and is elevated relative to the water quality standard. t is important to note that while there is no monitoring requirement for total hardness in the current Permit, only carbonate hardness, this variance request is intended to address total hardness. Table 1 presents a summary of the water quality data for these parameters at SD026 from January 2005 through December 2011, based on the analytical results from the monthly Discharge P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 1

18 Monitoring Reports (DMRs) as reported by CE in accordance with the Permit. The discharge at SD026 has elevated TDS, bicarbonates (alkalinity), total hardness, and specific conductance relative to the water quality standard. Table 1 SD026 Parameters of Concern Water Quality Summary (2005 through 2011) Parameter of Concern Data Availability Time Period Average Concentration Maximum Concentration Water Quality Standard Alkalinity, Bicarbonates as CaCO 3 (mg/l) Hardness, Total (mg/l) Total Dissolved Solids (mg/l) 2008 a Specific Conductance (µmhos/cm) ,115 1,350 1,000 a Data are not available for TDS between 2005 and CE has been performing studies and implementing a series of corrective actions to mitigate the elevated concentrations of the parameters of concern as soon as possible. For SD026, these efforts have included developing and implementing the following: Short-Term Mitigation Evaluation and mplementation Plan for SD026: The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD026 was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD026 in the near future. The Short-Term Mitigation Evaluation and mplementation Plan for SD026 (Barr, 2010b) was completed in mplementation of Short-Term Mitigation: The Short-Term Mitigation Evaluation and mplementation Plan for SD026 resulted in the implementation of a seepage collection and pump-back system upstream of SD026 during the summer of This system will remain in operation until a long-term compliance solution is determined. NPDES Field Studies Plan SD026 and NPDES Field Studies Report SD026: The field studies consisted of a year-long monitoring program. The objectives of the NPDES Field Studies Plan SD026 (Barr, 2010a) were to collect data to: o Assess the impact of the elevated sulfate in SD026 on wild rice stands and methylmercury concentration in receiving waters of the discharge; P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 2

19 o Assess the impact of elevated total dissolved solids, bicarbonates, hardness, and specific conductance in SD026 on the water quality and aquatic life (fish and macroinvertebrates) of receiving waters of the discharge; and o Collect additional data to support continued evaluation of treatment alternatives. The field studies were completed in 2011 (Barr, 2011a). Long-Term Mitigation Evaluation and mplementation Plan for SD026: The objective of the Long-Term Mitigation Evaluation and mplementation Plan for SD026 is to investigate technically and economically feasible methods and technologies for permanent mitigation of the elevated concentrations of the parameters of concern in SD026 with a focus on passive treatment. The Long-Term Mitigation Evaluation and mplementation Plan for SD026 (Barr, 2012a) was completed in April This plan, combined with the Short-Term Mitigation Evaluation and mplementation Plan for SD026, constitutes a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD026. Work Plan for nvestigation of Membrane Treatment at SD026: n addition to the Long-Term Mitigation Evaluation and mplementation Plan for SD026, a Work Plan for nvestigation of Membrane Treatment at SD026 (Barr, 2012b) was submitted to the MPCA in September This work plan includes a proposed schedule and protocol for conducting a pilot-scale test of membrane (reverse osmosis) treatment for SD026. While CE has been actively pursuing a solution for reducing the concentrations of the parameters of concern, additional time is required to test, evaluate and implement a viable solution. Therefore, CE requests a variance from the water quality standards for TDS, bicarbonates (alkalinity), total hardness, and specific conductance at SD026. This variance application is submitted in accordance with Minn. Rules Part subpart 2 and Minn. Rules part and P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 3

20 1.1 Minn. Rule Part , Subp. 2 Minnesota Rules (Variances) provides in relevant part: Subp. 2. n no case shall the board or commissioner grant a variance unless a written application has been made to the board or commissioner. The application must be served upon the commissioner. Subsections through provide the information required by MN Rules , Subpart 2, A. through H Name and Address of the Applicant A. Name and address of the applicant and the person who prepared the application. Applicant Cliffs Erie LLC Craig Hartmann, Area Manager Facilities P.O. Box 900 Hoyt Lakes, MN Person Who Prepared the Application Barr Engineering Company 4700 West 77 th Street Minneapolis, MN Signature of the Applicant B. The signature of the applicant or authorized representatives. Craig Hartmann Area Manager Facilities Cliffs Erie LLC P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 4

21 1.1.3 Description of Facility for which Variance is being Sought C. A description, including the location, of the business, plant, system, or facility for which a variance is sought. The Hoyt Lakes Mine Area is an inactive open pit taconite mine located primarily in Sections 1, 2, and of Township 59 North, Range 14 West in St. Louis County, Minnesota. The Mine Area was formerly owned and operated by LTV Steel Mining Company (LTVSMC) and was purchased by CE in 2001 after LTVSMC declared bankruptcy and ceased operation of the mine. Currently, the facility is covered by an approved Closure Plan which states The overall objective of the Closure Plan is to develop the site as a brownfield location for a future mineral processing/industrial site. Significant taconite reserves remain in the area and it may be possible to utilize the facilities as a base for construction of a direct steel making operation. n addition, several Cu/Ni deposits are located to the east of the plant. One company is proposing reuse of portions of the facility, which may lead to the development of a Cu/Ni mine and value added metals plant in the area. n either case, the presence of the facility would also make an excellent heavy industrial site. The Closure Plan and details have been developed in cooperation with the MDNR, MPCA and other local governments and agencies as appropriate. The Closure Plan will be available at the MDNR offices in Hibbing and St. Paul and at the MPCA offices in St. Paul. n general, all environmental hazards will be remediated, inactive pit areas closed, all buildings and structures not part of the brownfield development will be demolished, and all associated sites reclaimed and vegetated. The crushing/concentrating facilities, shops, warehouses, offices, railroad/dock and all utilities at the site will be left in place as part of the brownfield site. n the absence of brownfield development, these structures will be demolished and the land reclaimed. Tthe principal activities at the facility are related to maintenance and closure. The facility, as covered by the Permit, consists of mine pits; stockpile areas; haul roads, railways, and railroad yards; plant areas; material and equipment storage areas; and non-domestic wastewater treatment systems. Of the nine surface discharge stations listed in the Permit, three four are currently active (SD008, SD012, SD026, and SD033), one is active but unauthorized (SD030), and five four are currently inactive (SD008, SD009, SD010, SD011, and SD013). All surface discharge stations, with the exception of SD026, are pump dewatering or gravity overflow discharges from former mine pits. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 5

22 This variance document addresses the surface discharge station designated as SD026. Station SD026 is a culvert which conveys Second Creek under Dunka Road and is located approximately 1,500 feet downstream from the groundwater seep that forms the headwaters of Second Creek (in the southwest quarter of the southwest quarter of the northeast quarter of Section 16, Township 59 North, Range 14 West). The general site layout is shown on Figure 1. Second Creek is a tributary of the Partridge River within the Lake Superior watershed and is an unlisted water and as such, has the default beneficial use classifications of 2B, 3C, 4A, 4B, 5, and 6, as described in Minnesota Rule Chapter The water discharged through SD026 consists of both groundwater seepage and stormwater runoff. SD026 receives groundwater seepage which likely originates in part from Cell 1E of the Hoyt Lakes Tailings Basin. SD026 also receives a mixture of stormwater runoff from the area between the railroad embankment and Dunka Road, including the former Area 2 Shops Area and former reclaimed Knox Rail Refueling Area. CE has been performing studies and implementing a series of corrective actions to achieve compliance with SD026 water quality effluent limits for the parameters of concern as soon as possible. As part of short-term mitigation, a seepage collection and pump-back system upstream of SD026 was constructed and placed into operation during the summer of Groundwater seepage is collected from a pond upstream of SD026 and pumped to Cell 1E of the Hoyt Lakes Tailings Basin. Due to this modification, the discharge through SD026 has significantly decreased in volume. The remainder of the flow continues to discharge as Second Creek Nature of the Variance Sought D. The nature of the variance sought, including an identification of the applicable rules or standards from which a variance is sought, the period of time for which it is sought, and the reasons relied upon by the applicant in requesting the variance Parameters for which Variance is Requested CE requests a variance from the SD026 water quality effluent limits (assumed to be the applicable water quality standards) for total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance (parameters of concern) at SD026. While the current Permit does not contain effluent limits for three of the four parameters of concern (TDS, bicarbonates, and total hardness), the water quality standards were assumed to be applicable P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 6

23 effluent limits because the discharge at SD026 forms the headwaters of Second Creek (Class 2B, 3C, 4A, 4B, 5, and 6 waters). The water quality standards define the goals for a water body by designating its highest attainable uses and setting the criteria that protect those uses. Based on the monitoring data, the concentrations of these parameters at SD026 have exceeded (but are relatively close to) the potentially applicable water quality standards from Minnesota Rules Chapter : Hardness 500 mg/l Class 3C (industrial cooling and materials transport) and Minnesota Rules Chapter : Bicarbonates 5 meq/l (250 mg/l as CaCO 3 ) Class 4A (irrigation) Specific conductance 1,000 µmhos/cm Class 4A (irrigation) TDS 700 mg/l Class 4A (irrigation) Table 1 presents a summary of the water quality data at SD026 and compares the water quality standards to the current water quality data for SD026. The primary constituents contributing to the elevated TDS and specific conductance include bicarbonate, sulfate, and hardness (calcium and magnesium). Figure 2 illustrates the major anions and cations that are contributing to the TDS of the discharge at SD026. Comparisons between the monitoring data for the parameters of concern at SD026 and the water quality standards for Second Creek are shown in Figures 3 through 6. As discussed above, the current Permit does not contain effluent limits for three of the four parameters of concern (TDS, bicarbonates, and total hardness) and monitoring is only required for TDS, bicarbonates, and specific conductance. Monitoring for total hardness (Ca + Mg as CaCO 3 ) is not required by the current Permit; however, monitoring for carbonate hardness (as CaCO 3 ) is required. While a Consent Decree between MPCA and CE was issued in April 2010 and required CE to begin evaluating potential treatment technologies, meeting a permit limit equivalent to the water quality standard for each of the parameters of concern is substantially different than any limit CE has been required to comply with. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 7

24 Period of Time for which Variance is Requested CE requests this variance remain in effect for the duration of the reissued permit (no less than five years) Reasons Relied upon by the Applicant in Requesting the Variance CE requests a variance from the water quality standards for total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance at SD026 based on the following: t is not feasible to immediately implement a remedy to effectively mitigate or treat the parameters of concern (TDS, bicarbonates, total hardness, and specific conductance) to the applicable water quality standards. A variance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of the parameters of concern. The cost of an active system would be a substantial burden to this nonoperational facility. Passive long-term mitigation alternatives are not only the most compatible with this site, but also the most economically feasible. The results of the field studies indicate that there are no anticipated significant impacts related to water uses, or to air or land resources. The basis for these reasons are presented in the paragraphs below. Because the facility is inactive and sources of the SD026 discharge are groundwater seepage and stormwater runoff, there are no process changes that can be made to alter the discharge to meet the water quality standards. Thus, long-term water treatment and/or mitigation will be required to achieve the required reductions. Analysis of the overall composition of the water discharged at SD026 indicates that bicarbonate is the most significant contributor to the concentration of TDS (refer to Figure 2), followed by sulfate and hardness (calcium and magnesium). Because the concentrations of the four parameters of concern are relatively close to the applicable water quality standards, the reduction of any or all of these contributing constituents would likely also result in an overall reduction of TDS and specific conductance to concentrations less than the water quality standards. While removal of sulfate is not easily accomplished, bicarbonates and hardness are common water constituents that can be removed by active treatment processes such as chemical precipitation, ion exchange, and membrane filtration. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 8

25 However, because the Mine Area is an inactive facility, there are no existing, active wastewater treatment facilities to which the discharge from SD026 could be immediately routed. Because implementation of a treatment or mitigation technology will be necessary, a more passive system with minimal operation and maintenance requirements is preferred over active treatment, due to the inactive status of the facility and the desire to implement a treatment or mitigation technology that will be both effective and reliable on a long-term basis. CE has been actively pursuing a viable treatment/mitigation technology for SD026 since April Both a Short-Term Mitigation and mplementation Plan for SD026 and a Long-Term Mitigation and Evaluation and mplementation Plan for SD026 have been completed. The focus of these plans is to identify, test, and evaluate alternative mitigation or treatment measures. Each of these plans is discussed in more detail below. The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD026 was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD026 during the period the field studies were conducted. The conclusion of this report was that the treatment alternatives evaluated required significant time for bench testing, pilot testing, and fullscale implementation, along with significant capital and annual operation and maintenance costs, and that they could not be readily implemented to meet the water quality standards. Therefore, the nontreatment mitigation option of seepage collection and pump-back was selected for implementation under the required short-term action plan. The Long-Term Mitigation Evaluation and mplementation Plan for SD026 was completed with the objective of identifying and evaluating alternatives that could potentially mitigate/reduce the existing elevated concentrations of the parameters of concern and sulfate in SD026 over the long-term, building on the work completed as part of the Short-Term Mitigation Evaluation and mplementation Plan, NPDES Field Studies SD026, and bench testing that was performed related to the removal of the same parameters of concern at SD033 (Barr, 2011b; Barr, 2011c). Combined, these documents constitute a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD026. The alternatives identified and evaluated in Long-Term Mitigation Evaluation and mplementation Plan for SD026 include mitigation measures that over the long-term would limit the concentrations of dissolved solids in the SD026 discharge by reducing the loading of sulfate and the parameters of P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 9

26 concern through methods such as altering the attenuation or fate of the parameters within the watershed. Section 5.0 of the Long-Term Mitigation Evaluation and mplementation Plan for SD026 presents a summary of the effectiveness, implementability, long-term performance, and cost considerations relative to the alternatives to address the parameters of concern at SD026. Based on this evaluation, several mitigation measures and passive treatment systems present viable alternatives. However, both pre-implementation study efforts and a pilot-scale testing phase are required to verify effectiveness and provide input to a design prior to full-scale implementation. Additionally, CE has agreed to conduct further evaluation of an active treatment technology, membrane treatment (reverse osmosis), in accordance with the Work Plan for nvestigation of Membrane Treatment at SD026 submitted to the MPCA in September As with the mitigation measures and passive treatment systems identified in the Long-Term Mitigation Evaluation and mplementation Plan for SD026, a pilot-scale testing phase for membrane treatment is required to verify effectiveness and provide input to a design prior to any full-scale implementation. Section 6.3 of the Long-Term Mitigation Evaluation Plan for SD026 presents a proposed milestone schedule for implementation of the recommendations provided in that plan and Section 3.4 of the Work Plan for nvestigation of Membrane Treatment at SD026 presents a proposed milestone schedule specific to membrane treatment. Treatment of the SD026 discharge to the water quality standards is technologically feasible. However, as concluded in the Long-Term Mitigation and mplementation Plan for SD026 (Section 6.3), time will be required for bench testing, pilot testing, and full-scale implementation of technically and economically feasible methods for permanent mitigation of the elevated parameters. The estimated costs of implementing each of the alternatives considered are presented in Table 2Section 5.4 of the Long-Term Mitigation Evaluation and mplementation Plan for SD026 and discussed further in Section The estimated expenses associated with identifying and implementing an effective long-term treatment technology to reduce each of the parameters to a level that full compliance with water quality standards is consistently achieved, will result in a significant economic burden. The facts supporting each basis (economic and technical) are presented in the sections below. While the concentrations of TDS, bicarbonates, total hardness, and specific conductance at SD026 are elevated relative to the water quality standards, and this discharge would continue throughout the evaluation and implementation of a long-term mitigation technology, granting this variance will not P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 10

27 impair the existing beneficial uses or the level of water quality necessary to protect the beneficial uses of the receiving stream, as documented in the results presented in NPDES Field Studies Report SD026. The results of these studies support continued discharge at the current concentrations while a long-term solution is identified and implemented. Additional information on the impacts of the SD026 discharge is presented in Section Economic Burden E. f the applicant seeks a variance primarily on the grounds of economic burden, financial statements prepared or approved by a certified public accountant, or other person acceptable to the agency, which shall fairly set forth the status of the business, plant, system, or facility for each of the three financial years immediately preceding the year of the application, and an analysis of the effect of such financial status if the variance is not granted. While the cost of treating the discharge from SD026 to reduce the parameters of concern is not the primary sole grounds for requesting this variance, the economic impact of the various treatment systems should be considered. This facility is inactive and not producing a product. Closure activities at the facility have begun and CE has on-going financial responsibilities associated with these activities. CE s goal is to progress toward reduction of the elevated concentrations of the parameters of concern, providing for the potential redevelopment of the site. As stated in Section , passive (non-mechanical) long-term mitigation alternatives are not only the most compatible with this site, but also the most economically feasible. While there may be active (or mechanical) treatment alternatives that would reduce the concentration of the parameters of concern, they would require active operation and maintenance costs in perpetuity. While it is not possible to know the financial situation of a potential redevelopment enterprise, the perpetual financial responsibility of on -going treatment would likely render this site economically infeasible for redevelopment. Table 2 of this document and Section 5.0 of the Long-Term Mitigation Evaluation and mplementation Plan for SD026 presents an overview of the effectiveness, implementability, longterm performance, and cost considerations relative to the alternatives to address the parameters of concern at SD026. The estimated costs represent an estimate of the total cost of each technology as a net present value (20 years, 3.5% discount rate) and are considered conceptual level costs or Class 5 estimates (according to the Association for the Advancement of Cost Engineering nternational) and as such should only be used for comparing the relative value of the technologies evaluated. The P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 11

28 estimated net present values of the active treatment alternatives range from $10,700,000 for lime softening to $22,700,000 for membrane treatment, while the net present values of the passive treatment alternatives range from $2,600,000 for enhanced natural attenuation to $14,800,000 for a floating wetland. These significant differences in net present value further demonstrate that a passive treatment alternative would be more economically feasible than an active treatment alternative. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 12

29 Table 2 Effectiveness, mplementation, and Cost nformation for Potential Treatment Technologies at SD026 S-44 Effectiveness in Meeting Water Quality Standards mplementation Considerations Estimated Costs 4,5 Alternative Sulfate Bicarbonate Hardness Total Dissolved Solids Specific Conductivity Suitability for Closed Site nvestigations Required Capital Cost Annual O&M Cost Net Present Value 3 Enhanced Natural Attenuation 2 High Can be implemented in the near future, monitoring only $ 790,000 $ 150,000 $ 2,600,000 Surface-Flow Wetland/Lagoon 2 Medium Requires hydraulics and siting evaluations and pilot testing prior to full scale implementation $ 3,800,000 $ 160,000 $ 5,600,000 Floating Wetland 2 Medium Requires hydraulics and siting evaluations and pilot testing prior to full scale implementation $ 11,800,000 $ 220,000 $ 14,800,000 Lime Softening 1 Low Requires hydraulics, siting evaluations and bench testing prior to full scale implementation $ 6,900,000 $ 270,000 $ 10,700,000 on Exchange (modified Sulf-X) 1 Low Requires hydraulics, siting evaluations, bench testing, and pilot testing prior to full scale implementation $ 15,100,000 $ 1,100,000 $ 30,000,000 Membrane Treatment (Reverse Osmosis) 1 Low Requires hydraulics, siting evaluations and pilot testing of membranes and brine concentrate management prior to full scale implementation $ 10,700,000 $ 900,000 $ 22,700,000 Notes: 1. Cost for this option only includes treatment of the parameters of concern (does not specifically include treatment of sulfate to 10 mg/l). 2. Cost for this option includes treatment of sulfate in addition to the parameters of concern; however, treatment of sulfate to 10 mg/l is unproven years, 3.5% 4. These cost estimates are considered conceptual level costs or Class 5 estimates (according to the Association for the Advancement of Cost Engineering nternational), and should only be used for comparing the relative value of the technologies evaluated in this Plan. The typical associated level of accuracy of Class 5 cost estimates is ±25 to 100%. 5. Costs may vary from those presented in previously submitted Plans, due to additional information obtained during interim periods. Key: Likely to be effective in meeting the water quality standard at end-of-pipe Ability to meet water quality standard uncertain or requires additional testing to demonstrate Unable to meet water quality standard at end-of-pipe

30 While CE is not requesting this variance primarily solely on the grounds of economic burden, the cost of an active treatment system will be a substantial burden to a nonoperational facility. Furthermore, Wwhile it is not possible to know the financial situation of a potential redevelopment enterprise, the perpetuallong-term financial responsibility of on-going active treatment willwould likely be a consideration renderin the this site economically infeasibilitye for redevelopment. The additional time required to continue to evaluate both the technological and economic feasibility of the potential treatment alternatives is critical. To aid in the determination of economic burden as it relates to this variance request, CE has provided additional financial information in Appendix B via the worksheets associated with the EPA nterim Economic Guidance Workbook (EPA-823-B ; March 1995). Specifically, the contents of each worksheet are as follows: Worksheet A contains the rationale and approach to provide additional treatment to the water quality standards for the pollutants for which variance are being sought. Worksheet G contains the annualized costs using the methods from the EPA nterim Economic Guidance. Worksheets H through L provide information related to the financial impact to CE of not granting the variance. Worksheet N provides information on other factors to consider in making a determination of widespread social and economic impacts to the surrounding area. n addition to the information presented in the worksheet CE purchases approximately $1.5 million of services from various industries (utilities, consultants, equipment vendors, mechanical services, etc.) throughout northern Minnesota. f the CE NPDES permits are not re-issued, future development at this site will not be possible. Therefore, the following are at risk: o Future employment in Northeastern Minnesota associated with potential new mining operations at the CE site o County and state tax revenues o Mining royalties to the county and state o Spin off industries impacted by mining As stated previously, CE s Hoyt Lakes Mine Area was formerly owned and operated by LTV Steel Mining Company (LTVSMC) and was purchased by CE in 2001 after LTVSMC declared bankruptcy and ceased operation of the mine. When operation of the mine ceased, 1,500 workers lost their jobs; P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 14

31 this had a major effect on the economy of the mining towns of Hoyt Lakes and Aurora and the surrounding rural area. Mesabi Nugget, which is located west of this property on land that was also formerly owned by LTVSMC, has restored approximately 120 jobs to the area. While this was a positive move, it barely begins to offset the significant economic hardship in this area. Potential future redevelopment would bring more jobs to the area both directly and through demand for other services; however, this development may be constrained unless a variance applicable to the outfall is granted. As an example of a potential project dependent on reissuance of the Hoyt Lakes Mine Area NPDES/SDS Permit, in a report prepared for PolyMet by the Labovitz School of Business and Economics, NorthMet Economic mpact 2011 Update; Economic mpact of PolyMet s NorthMet Project on St. Louis County, Minnesota, the economic impact of the proposed NorthMet project on the region includes: 360 direct mining jobs; 330 jobs in related dependent industries; 300 jobs dependent on household spending; Annual payroll spending of almost $330 million; Approximately $515 million impact of mining output, or sales, on St Louis County; and During peak construction approximately 800 jobs, $247 million in payroll taxes and $490 million in sales impact Technological Feasibility F. f the applicant seeks a variance on grounds that compliance is not technologically feasible, a report from a registered professional engineer, or other person acceptable to the agency, stating fully the reasons why compliance is not technologically feasible. Treatment of the SD026 discharge to the water quality standards is expected to be technologically feasible. However, as concluded in the Short-Term Mitigation and mplementation Plan for SD026 and the Long-Term Mitigation and mplementation Plan for SD026, time will be required for bench testing, pilot testing, and full-scale implementation of technically feasible methods for permanent mitigation of the elevated parameters. The primary basis of this variance application is that meeting the water quality standards for the parameters of concern is not technologically feasible by the next anticipated permit reissuance date. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 15

32 The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD026 was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD026 during the period the field studies were conducted. The conclusion of this evaluation was that all of the treatment alternatives evaluated required significant time for bench testing, pilot testing, and full-scale implementation, along with significant capital and annual operation and maintenance costs, and that they could not be readily implemented to meet the water quality standards. Therefore, the non-treatment mitigation option of seepage collection and pump-back was selected for implementation under the required short-term action plan. Given that no technologies were identified that could be both be readily implemented and function as a long-term solution, CE completed a Long-Term Mitigation Evaluation and mplementation Plan for SD026 with the objective of identifying and evaluating alternatives that could potentially mitigate/reduce the existing elevated concentrations of the parameters of concern and sulfate in SD026 over the long-term, building on the work completed as part of the Short-Term Mitigation Evaluation and mplementation Plan for SD026, NPDES Field Studies SD026, and bench testing that was performed related to the removal of the same parameters of concern at SD033 (Barr, 2011b; Barr, 2011c). The alternatives identified and evaluated in the Long-Term Mitigation Evaluation and mplementation Plan for SD026 include mitigation measures that over the long-term would limit the concentrations of dissolved solids in the SD026 discharge by reducing the loading of sulfate and other parameters of concern through methods such as altering the attenuation or fate of the parameters within the watershed. The alternatives evaluated included natural attenuation, enhanced natural attenuation, floating wetland, and a surface- flow wetland/lagoon. The alternatives were evaluated against the following criteria: effectiveness, implementability, longterm performance, and cost. Section 5.0 of the Long-Term Mitigation Evaluation and mplementation Plan for SD026 presents a summary of the treatment options evaluated for SD026. Based on this evaluation, the following next steps were recommended for implementation of mitigation activities at SD026: Evaluation of natural attenuation by conducting additional monitoring along the flow path between the seep and Dunka Road. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 16

33 Mapping of the watershed and characterizing the existing wetland vegetation to evaluate the potential for increasing the hydraulic retention time to enhance natural attenuation or to install a lagoon and surface-flow wetland. Bench and pilot testing of nutrient addition to enhance primary production for the reduction of bicarbonate and other parameters of concern. mplementation of natural attenuation, enhanced natural attenuation, or a lagoon and surface-flow wetland system to reduce concentrations of the parameters of concern at SD026. After further discussions and correspondence with the MPCA, natural attenuation was removed from consideration and thus will not be evaluated further. n the MPCA s July 25, 2012 letter to CE (MPCA, 2012), the MPCA indicated that further evaluation of an active treatment technology, such as membrane treatment, would also be required. This evaluation is in addition to the evaluation of passive treatment technologies at SD026 (as proposed in the Long-Term Mitigation Evaluation and mplementation Plan for SD026). Therefore, a Work Plan for nvestigation of Membrane Treatment at SD026 was submitted to the MPCA in September This work plan included a proposed schedule and protocol for conducting a pilot-scale test of membrane treatment of SD026. Specifically, the pilot-scale test plan includes evaluation of reverse osmosis technology and evaluation of associated concentrate (brine) management approaches and the use of concentrate volume reduction technologies. During the development of the Short-Term Mitigation Evaluation and mplementation Plan for SD026 (Barr, 2010b) and the Long-Term Mitigation Evaluation and mplementation Plan for SD026 (Barr, 2012a), CE has undertaken a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD026. This comprehensive review included: A literature review of mitigation/treatment technologies for the parameters of concern and sulfate (Barr, 2010b; Section 3.0). Preliminary screening of potential mitigation/treatment alternatives based on preliminary assessments of effectiveness, implementability, and cost to identify a limited number of potentially feasible alternatives for detailed evaluation (Barr, 2010b; Section 5.1 and Table 2). P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 17

34 Conceptual development of a plan for implementation of mitigation/treatment systems for the parameters of concern and sulfate that could be applied to the discharge at SD026 (Barr, 2010b; Section 4.0 and Sections 5.2 through 5.4). Evaluation of the feasibility of the mitigation/treatment technologies that were selected from the preliminary screening process based on effectiveness, implementability, and cost (Barr, 2010b; Section 5.0). Additional screening of potential mitigation alternatives for long-term implementation including a review of the technologies included in the preliminary screening (Barr, 2012a; Section 3.0). Detailed evaluation of mitigation/treatment technologies that may prove effective for implementation at SD026 for removal of the parameters of concern and sulfate (Barr, 2012a; Section 4.0). Evaluation of the feasibility of implementing the mitigation/treatment technologies based on effectiveness, implementability, long-term performance, and cost (Barr, 2012a; Section 5.0 and Table 3). Recommendations for implementation (Barr, 2012a; Section 6.0). Based on the results of the screening processes, the following potential treatment technologies were evaluated further based on effectiveness, implementability, long-term performance, and cost: Natural attenuation Enhanced natural attenuation Surface-flow wetland/lagoon Floating wetland Lime softening on exchange (Sulf-X) Membrane treatment (reverse osmosis) Table 2 summarizes the evaluation of effectiveness, implementability, and cost for each of these potential treatment technologies. Appendix C contains: Further details related to the review and evaluation of the potential treatment technologies and references to the information sources. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 18

35 Further details related to each of the potential treatment technologies selected for further evaluation. Based on this comprehensive review of potential treatment technologies for SD026, CE has selected three potential treatment technologies for further evaluation through pilot testing: Enhanced natural attenuation Surface-flow wetland/lagoon Membrane treatment (reverse osmosis) A pproposed milestone schedules waswere developed as part of this reportthe Long-Term Mitigation Evaluation and mplementation Plan for SD026 and the Work Plan for nvestigation of Membrane Treatment at SD026. in total, the pre-implementation studies, design of the pilot systems, and operation of the pilot testing is expected to occur over the course of the next permit cycle.a minimum of three to four years, not including time for agency review and approval of work plans submitted throughout the process. The complete implementation of full scale mitigation for SD026 (including design and construction) could potentially be completed in approximately six years, again not including time for agency review and approvals and any other permitting that may be required. The proposed milestone schedule for the testing and implementation of mitigation at SD026 is outlined in Section 6.3 of the Long-Term Mitigation Evaluation and mplementation Plan for SD Other Data or nformation Required by Rule or Standard G. Other additional data or information that is required by any applicable agency rule or standard. No additional data has been required by the MPCA Other Relevant Data or nformation Required by Agency H. Any other relevant data or information that the board or the commissioner deems essential to a determination on the application, including, but not limited to the following: General Description of Materials Discharged, Nature of Materials and Proposed Methods for Control 1. A general description of the materials handled or processed by the applicant that are pertinent to the subject application, and a statement of the nature and quantity of the materials being discharged, emitted, or disposed of, and that can reasonably be expected P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 19

36 to be discharged, emitted, or disposed of during the period of the proposed variance, and proposed methods for the control of these materials. A general description of the Hoyt Lakes Mine Area and the characteristics of the SD026 discharge are provided in Section Additional summaries of the water quality data are included in the Hoyt Lakes Mine Area NPDES/SDS Supplemental Permit nformation package, which is being submitted in conjunction with this variance request. The discharge at SD026 consists of both groundwater seepage (likely originating in part from Cell 1E of the Hoyt Lakes Tailings Basin) and stormwater runoff (from the area between the railroad embankment and Dunka Road). As part of short-term mitigation, a seepage collection and pumpback system upstream of SD026 was constructed and placed into operation during the summer of This system significantly decreases the discharge at SD026 by collecting groundwater seepage from the existing pond upstream of SD026 and pumping it to Cell 1E of the Hoyt Lakes Tailings Basin. This short-term mitigation seepage collection and pump-back system will remain in operation during the period of the proposed variance. Because the sources of the SD026 discharge are groundwater seepage and stormwater runoff, there are no process changes that can be made to eliminate the discharge or reduce the concentration of the parameters of concern in the discharge. The proposed method of control is to continue the pursuit of long-term reduction of the elevated concentrations of the parameters of concern through implementation of the recommendations presented in the Long-Term Mitigation Evaluation and mplementation Plan for SD026. Therefore, passive technologies that have lower need for maintenance and monitoring are given preference over mechanical technologies Proposed Plan to Reduce Emission Levels to Lowest Possible 2. A comprehensive proposed plan indicating the steps to be taken by the applicant during the period of the variance, even if the applicant is seeking a permanent variance, to reduce the emission levels or discharges to the lowest limits practical. As presented in the sections above, the sources of the SD026 discharge are groundwater seepage and stormwater runoff and there are no process changes that can be made to eliminate the discharge or reduce the concentration of the parameters of concern in the discharge. CE has been actively pursuing alternatives to meet the water quality standards, including completion of several studies P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 20

37 focused on the identification and evaluation of viable mitigation and/or treatment technologies and has developed a well-designed and focused process to identify the most appropriate alternative. The most recent report, Long-Term Mitigation Evaluation and mplementation Plan for SD026, recommended the following next steps for implementation of mitigation activities at SD026: Further evaluation of natural attenuation by conducting additional monitoring along the flow path between the seep and Dunka Road. Further evaluation of the potential for increasing the hydraulic retention time in the watershed to enhance natural attenuation or to install a lagoon and surface-flow wetland through mapping of the watershed and characterizing the existing wetland vegetation. Further evaluation of nutrient addition to enhance primary production for the reduction of bicarbonate and other parameters of concern through bench and pilot testing. mplementation of natural attenuation, enhanced natural attenuation, or a lagoon and surface-flow wetland system to reduce concentrations of the parameters of concern at SD026. After further discussions and correspondence with the MPCA, natural attenuation was removed from consideration and thus will not be evaluated further. Section 6.0 of the Long-Term Mitigation and mplementation Plan for SD026 outlined a detailed process for implementing the report recommendations. A proposed milestone schedule for implementation of the pre-implementation studies, pilot testing, and full-scale implementation (if appropriate) was developed as discussed in Section Additionally, as discussed in Section 1.1.6, CE has agreed to conduct further evaluation of an active treatment technology, membrane treatment (reverse osmosis), in accordance with the Work Plan for nvestigation of Membrane Treatment at SD026 submitted to the MPCA in September This work plan includes a proposed schedule and protocol for conducting a pilot-scale test of membrane treatment of SD026. Because there are no process changes that can be made to reduce or eliminate the parameters of concern in the SD026 discharge and there is little to no impact from these parameters on the receiving stream (see Section ), CE proposes new nterim Period Limits consistent with the current water quality for the period of the variance. The proposed nterim Period Limits for each of 21 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx

38 the parameters of concern are shown in Table 23. These nterim Period Limits are based on a reasonable potential to exceed analysis using available monitoring data from January 2005 through December 2011 with a 99-percent confidence interval, consistent with the United States Environmental Protection Agency (US EPA) Technical Support Document for Water Quality-Based Toxics Control (US EPA, 1991). This is the level currently achievable at the SD026 discharge. Table 23 SD026 Proposed nterim Period Limits Parameter of Concern Proposed nterim Period Limits (Daily Max and Monthly Average) Water Quality Standard Alkalinity, Bicarbonates as CaCO 3 (mg/l) Hardness (mg/l) Total Dissolved Solids (mg/l) 1, Specific Conductance (µmhos/cm) 1,639 1, Effect on Air, Water and Land Resources which will Result from Approval of Variance 3. A concise statement of the effect upon the air, water, and land resources of the state and upon the public and other persons affected, including those residing in the area where the variance will take effect, which will result from board or commissioner approval of the requested variance. Air mpacts Because hardness, total dissolved solids, bicarbonates, and specific conductance are all the result of dissolved minerals in the water, there are no expected air impacts. The minerals will remain dissolved in the water at the temperatures and chemistry at which Second Creek and the Partridge and St. Louis Rivers flow. Therefore, there will not be any air impacts from SD026 if a variance for the parameters of concern is granted. Water mpacts A year-long field study (NPDES Field Studies Report SD026, Barr, 2011a) was conducted to characterize and assess the water quality and biological condition of streams directly adjacent and downstream of outfall SD026. Testing was completed on the receiving water Second Creek and a nearby control stream Bear Creek. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 22

39 Water quality sampling and Whole Effluent Toxicity (WET) testing were conducted to evaluate whether the groups of constituents originating from SD026 have toxic properties. Biological monitoring for aquatic invertebrates was also conducted to determine the effect of discharges from SD026; however, no fish monitoring was conducted due to lack of suitable habitat in Second Creek downstream of SD026. Biological monitoring is important because it highlights the true in-stream effect of a given discharge and is able to separate the chemical effect from the habitat effect. A habitat evaluation was also conducted as part of the field studies to quantify the difference in habitat quality between the downstream sites and the control sites used in the study. The results of this study indicate that the chemical composition of the water from the permitted outfall SD026 is different from the composition of the receiving water Second Creek, and is different from waters that served as reference or background sites for the field investigation. As noted, the SD026 discharge has elevated concentrations of the parameters of concern. Whole Effluent Toxicity (WET) Tests The chronic WET test results strongly suggest that it is unlikely that the constituents observed and the concentration of the constituents observed will cause any mortality of aquatic life in Second Creek downstream of SD026. Reproduction (which is a much more sensitive indicator than mortality) of the test species C. dubia was considered to be reduced in two tests compared to the reference site Bear Creek and the Partridge River. t should be noted that reproduction was not severely reduced in SD026 compared to the reference sites and for one test there was no significant difference between SD026 and the reference sites. WET testing (particularly chronic tests with C. dubia) is a sensitive methodology and the results suggest that the tailings basin water, which was the primary source of water to SD026 during the study period, is lacking any notable toxicant and the additive or cumulative effects of the constituents present are not significant. A statistical analysis of outfall SD026 water and the receiving waters suggest that reduced reproduction for C. dubia in some tests is not due to toxicity, but rather is largely due to nutrient constituents that are lacking in the SD026 water, including organic carbon, phosphorus, nitrogen, and possibly some trace metals. t does not appear that bicarbonate or hardness are responsible for the WET test results that indicate reproductive differences between water from SD026 and the reference sites. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 23

40 Macroinvertebrates Overall, the macroinvertebrate community in Second Creek just downstream of outfall SD026 is comparable to the macroinvertebrate community in Bear Creek (the chosen reference site) and there is no evidence that the macroinvertebrate community in Second Creek is being notably impacted by the discharge from SD026. n Second Creek, just downstream of SD026, there are more sensitive species. t should be noted that Second Creek has better habitat quality (according to the QHE) than Bear Creek. However, Second Creek has a much smaller watershed and flow compared to Bear Creek, and hence it is expected that there will be less diversity simply due to the stream size and order. Again, due to the similarity of the macroinvertebrate communities in Bear Creek and Second Creek, and due to an overall high proportion of sensitive species, it can be concluded that there is no significant effect on the macroinvertebrate community in Second Creek due to the SD026 discharge. Summary of Field Study Results Overall, the results from the Field Study stream investigation indicate that while the SD026 discharge water has elevated concentrations of some parameters (e.g., hardness, total dissolved solids, magnesium, sodium), the biological monitoring data for macroinvertebrates indicate no measurable or notable effects in Second Creek compared to the data from the reference stream (Bear Creek). Downstream River Water Users For this study, the downstream river water users were separated into four groups: (1) Municipal water treatment facilities, (2) ndustrial river water users, (3) Other permitted river water users, and (4) Non-permitted river water users. A separate analysis was conducted for each of the four groups. While the analysis was general, the data presented are based on existing water quality data available on the MPCA and Minnesota Department of Natural Resources (MDNR) websites. Municipal Water Treatment Facilities Based on a review of the water appropriation permits issued by the MDNR 1, the only municipal user of water in the vicinity of SD026 is the City of Hoyt Lakes. However, the City of Hoyt Lakes appropriates water from Colby Lake which does not receive water 1 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 24

41 from Second Creek. Thus, the City of Hoyt Lakes is not affected by the discharge. There are no municipal users of water downstream of SD026 on Second Creek or the Partridge River. ndustrial Water Users Based on a review of the water appropriation permits issued by the MDNR, there are no industrial uses of Second Creek or the Partridge River downstream of the discharge. Minnesota Power s Laskin Energy Center appropriates water from the Partridge River; however it is located upstream of the river s confluence with Second Creek. There are industrial water users located further downstream on the St Louis River (United Taconite, Tate & Lyle Citric Acid, nc., USG, Minnesota Power, Sappi, Heathmark, nc. and WLSSD) which appropriate water from the St. Louis River. Other Permitted River Water Users There are no appropriations permits for using the water for agricultural irrigation (either crop or livestock watering) or for other uses. Non-Permitted River Water Users No unpermitted users are known to use either Second Creek or the Partridge River. n summary, the discharge through SD026 is unlikely to adversely affect downstream river water users. Land Resources Because there are no permitted water appropriations for agricultural purposes (see above), and because there is little if any agriculture in the area, it is unlikely that there will be impacts on row crops, small grains or livestock irrigation. However, there may be unpermitted uses, so potential impacts on a variety of crops, trees and grasses are noted below. Table 3 4 provides a listing of garden crops and fruits that are the most sensitive to salinity: beans, carrots, onions, radishes, strawberries, and raspberries (threshold levels ranging from 400 to 1,000 mg/l). Cabbage, lettuce, peppers, spinach, sweet potatoes, tomatoes, apples, pears, grapes, plums, blackberries, and boysenberries are moderately sensitive to salinity with threshold levels of 500 to 1,300 mg/l. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 25

42 Table 34 Relative Salt Tolerance of Various Cultivated Plants* Non Tolerant (0 1,400 mg/l) Slightly Tolerant (1,400 2,800 mg/l) Nurseries Moderately Tolerant (2,400 5,600 mg/l) Tolerant (5,600 11,200 mg/l) azalea cottoneaster red pine rose sugar maple viburnum white pine apple forsythia linden Norway maple red maple black locust boxwood beet red oak white ash white oak arborvitae juniper Russian olive Truck Gardening begonia blueberry carrot green bean onion pea radish raspberry strawberry cabbage celery cucumber grape lettuce pepper potato snapdragon sweet corn broccoli chrysanthemum geranium marigold muskmelon spinach squash tomato zinnia Golf Courses asparagus Swiss chard creeping bentgrass Kentucky bluegrass perennial ryegrass red fescue nugget Kentucky bluegrass seaside creeping bentgrass alkaline grass * Source: Rosen et al Soil Test nterpretations and Fertilizer Management for Lawns, Turf Gardens, and Landscape Plants According to this list, there are several trees and shrubs that are described as non-tolerant with plant damage expected at TDS concentrations of 0 to 1,400 mg/l. All other listed trees and shrubs are tolerant of salinity levels over 1,400 mg/l. The list also shows that all grasses are tolerant of salinity levels of over 1,400 mg/l. Given the relatively low population in the area and the short growing season, there does not appear to be a major impact on the land resources that will result from the agency s approval of the requested variance. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 26

43 Statement of Alternatives to Proposed Operation which have been Considered 4. A statement of the alternatives to the proposed operation under the variance which have been considered by the applicant. The discharge at SD026 is not associated with a proposed or current operation; rather it is an existing discharge of groundwater seepage and stormwater runoff. The continued occurrence of groundwater seepage and stormwater runoff at this location is independent of any action by CE. CE would continue to proceed with the MDNR-approved Closure Plan. Therefore, there are no alternative operations to consider Effects from Denial of Variance 5. A concise statement of the effect on the establishment, maintenance, operation, and expansion of business, commerce, trade, traffic, and other economic factors that may result from approval and from denial of the requested variance. Compliance with the water quality standard for the parameters of concern at this time would result in substantial economic burden to a closed facility. mplementing a successful remedy prior to the reissuance of the Permit is not feasible due to the time required to evaluate, test and implement a viable mitigation and /or treatment technology. Because the source of the discharge at SD026 is groundwater seepage and stormwater runoff, there are no process changes that can be made to eliminate the elevated concentrations for the parameters of concern. Granting a variance during the next permit cycle will allow CE to properly identify, test, design, and implement an effective mitigation and/or treatment technology without compromising the environment or public health, safety, and welfare. As identified in Section of this document, denial of the variance may jeopardize future economic growth and employment in Northeastern Minnesota. 1.2 Variance Requirements Relative to Minn. Rule Part and n order to receive a variance for a new or expanded discharge in the Lake Superior Basin, relative requirements in Minn. Rules and must be met. Because a variance is not being requested for a GL-pollutant, MN Rule does not apply. Because a variance is not being requested for any bioaccumulative chemicals of concern (BCC) or P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 27

44 bioaccumulative substances of immediate concern (BSC), the requirements of MN Rules are not applicable. 1.3 United States Environmental Protection Agency (EPA) Facility Specific Variance Application Please refer to Appendix A for the US EPA Facility Specific Standard Variance Data Sheet. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 28

45 2.0 References Barr Engineering Company (Barr), 2010a. NPDES Field Studies Plan SD026. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. May Barr Engineering Company (Barr), 2010b. Short-Term Mitigation Evaluation and mplementation Plan for SD026, NPDES/SDS Permit No. MN Prepared for Cliffs Erie, LLC and PolyMet Mining nc. June Barr Engineering Company (Barr), 2011a. NPDES Field Studies Report SD026. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2011b. Permeable Reactive Barrier Bench Test Report SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2011c. Floating Wetland Bench Test Report SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2012a. Long-Term Mitigation Evaluation and mplementation Plan for SD026, NPDES/SDS Permit No. MN Prepared for Cliffs Erie, LLC and PolyMet Mining nc. April Barr Engineering Company (Barr), 2012b. Work Plan for nvestigation of Membrane Treatment at SD026, NPDES/SDS Permit No. MN Prepared for Cliffs Erie LLC and PolyMet Mining nc. September Minnesota Pollution Control Agency (MPCA), RE: April 6, 2010, Cliffs Erie, LLC Consent Decree, Review of Long Term Plans SD033 and SD026. July 25, Labovitz School of Business and Economics, NorthMet Economic mpact 2011 Update: Economic mpact of PolyMet s NorthMet Project on St. Louis County, Minnesota. January U.S. Environmental Protection Agency (US EPA), Technical Support Document for Water Quality-Based Toxic Control. EPA/505/ March P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\4.0 SD026 Variance Application (Updated)\SD026 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Att 6 - Variance SD026\SD026 Variance Application.docx 29

46 Barr Footer: ArcGS 10.0, :01: File: :\Projects\23\69\1072\Maps\Reports\Short_Term_Mitigation_Evaluation_SD026\NPDES_Permitting\Figure 1 General Site Layout.mxd User: JJL FSA Aerial Photo!.!. Existing Surface Discharges Rivers and Streams DNR Mine Features (2009) Stockpile n-pit Stockpile Mine Pit Tailings Basin 2,000 1, ,000 Feet Figure 1 GENERAL STE LAYOUT SD026 Cliffs Erie, LLC

47 Class4ATDS WQS (700mg/L) 500 TDS(mg/L) Other Sodium Calcium Magnesium Sulfate Alkalinity Figure 23 SD026 onic Composition SD026TDS

48 1000 Figure 3 SD026 Water Quality Data: Bicarbonates Bicarbonates (mg/l) Water Quality Standard = 250 mg/l 100 0

49 1000 Figure 4 SD026 Water Quality Data: Hardness, Total Hardness, Total (mg/l) Water Quality Standard = 500 mg/l

50 1500 Figure 5 Water Quality Data: Specific Conductance Specific Conductance (µmhos/cm) Water Quality Standard = 1,000 umhos/cm

51 1000 Figure 6 SD026 Water Quality Data: Total Dissolved Solids Water Quality Standard = 700 mg/l 600 TDS (mg/l)

52 Appendix A EPA Facility Specific Standard Variance Data Sheet

53 Facility Specific Standard Variance Data Sheet S-44 Directions: Please complete this form electronically. Record information in the space provided. Select checkboxes by double clicking on them. Do not delete or alter any fields. For citations, include page number and section if applicable. Please ensure that all data requested are included and as complete as possible. Attach additional sheets if needed. Section : General nformation Name of Permittee: Cliffs Erie LLC Facility Name: Cliffs Erie Hoyt Lakes Mining Area Submitted by: Craig Hartmann, Area Manager - Facilities State: Minnesota Substance: Alkalinity bicarbonate as CaCO3, total hardness, total dissolved solids (TDS) and specific conductance Date completed: Permit #: MN WQSTS #: SD026 Duration of Variance Start Date: Permit reissuance date End Date: Duration of the permit (no less than 5 years s this permit a: First time submittal for variance. Renewal of a previous submittal for variance. (Complete Section X) Description of proposed variance: A variance from the water quality standards for Alkalinity bicarbonate as CaCO3, total hardness, total dissolved solids and specific conductance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of these parameters. List names of all who assisted in the compilation of data for this form, including the completion date of their contribution: Cliffs Erie LLC and Barr Engineering - April 2, 2012 Section : Criteria and Variance nformation Water Quality Standard from which variance is sought: Total Hardness 500 mg/l [Class 3C - industrial cooling and materials transport]; Bicarbonates 5 meq/l (250 mg/l as CaCO3), Specific Conductance 1000 µmhos/cm; TDS 700 mg/l [Class 4A-irrigation] Ambient substance concentration: See below Measured Estimated Default Unknown f measured or estimated, what was the basis? nclude citation. The discharge occurs at the headwaters of Second Creek. Therefore, the ambient water quality of Second Creek at the point of the discharge is equivalent to the water quality of the discharge. Average effluent discharge rate: 0.4MGD Maximum effluent discharge rate: 0.9MGD Effluent substance concentration: See Minnesota Measured Estimated Default Unknown Variance Application Table 1 f measured or estimated, what was the basis? nclude citation. Average effluent concentrations were calculated using historical water quality monitoring data from the period of January 2005 through December See the Minnesota variance application. Level currently achievable (LCA): Total Hardness 955 mg/l * Alk. Bicarb. as CaCO3 863 mg/l * Spec. Conductance 1,639 µmhos/cm* TDS 1,046 mg/l* *Daily Max and Monthly Average effluent concentrations Variance Limit: To be determined. Target value(s): Water quality standards listed above. What data were used to calculate the LCA, and how was the LCA derived? mmediate compliance with LCA is required. The LCAs are based on a reasonable potential to exceed analysis using available monitoring data from January 2005 through December 2011 with a 99-percent confidence interval.

54 Explain the basis used to determine the variance limit (which must be LCA). nclude citation. An RPE calculation was the basis for the proposed LCA. Select all applicable factors applicable as the basis for the variance as provided for by 40 CFR (g). Summarize justification below: See Minnesota variance request Section : Location nformation Counties in which water quality is potentially impacted: St. Louis County, Minnesota Receiving waterbody at discharge point: Second Creek (headwaters) Flows into what stream / river? Partridge River How many miles downstream? 10.1 Coordinates of discharge point (UTM UMT Northing , Easting , Zone 15N, Datum NAD 83 or Latitude and Longitude): What are the designated uses associated with this waterbody? Minnesota Class 2B, 3C, 4A, 4B, 5, 6 receiving water (Second Mine Creek) What is the distance from the point of discharge to the point downstream where the concentration of the substance falls to less than or equal to the chronic criterion of the substance for aquatic life protection? The discharge at SD026 currently meets all chronic criteria applicable to Class 2B waters. Provide the equation used to calculate that distance (include definitions of all variables and identify the values used for the clarification, and include citation): Not applicable. dentify all other variance permittees for the same substance which discharge to the same stream, river, or waterbody in a location where the effects of the combined variances would have an additive effect on the waterbody: Mesabi Nugget Delaware, LLC has applied for a water quality standards variance for the identical parameters at NPDES/SDS permit MN outfall SD001 which also discharges to Second Creek at a location that is approximately 2.1 miles downstream of SD026. Please attach a map, photographs, or a simple schematic showing the location of the discharge point as well as all variances for the substance currently draining to this waterbody on a separate sheet. s receiving waterbody on CWA 303 (d) list? f yes, please list the impairments below. Yes No Unknown Section V: Public Notice Has a public notice been given for this proposed variance? Yes No f yes, was a public hearing held as well? Yes No What type of notice was given? Notice of variance included in notice for permit. Separate notice of variance. MPCA public notice process will be Date of public notice: Date of hearing: followed Were comments received from the public in regards to this notice or hearing? Yes No

55 f yes, where can these comments be found? S-44 Section V: Human Health s receiving water designated as a Public Water Supply? Yes No Applicable criteria affected by variance:. dentify any expected impacts that the variance may have upon human health, and include any citations: Not applicable. Section V: Aquatic Life and Environmental mpact Minnesota Class 2 aquatic life and recreation use designations apply to Aquatic life use designation of receiving water: receiving water (Class 2B applies at the discharge point per MN Rules , subp. 2) Applicable criteria affected by variance: Not Applicable dentify any environmental impacts to aquatic life expected to occur with this variance, and include any citations: No environmental impacts are expected see Minnesota Variance Application. List any Endangered or Threatened species known or likely to occur within the affected area, and include any citations: See the attached table which provides the threatened or endangered species within 5 miles of the discharge point (state or federal listed) and approximate distance from the discharge point. Section V: Economic mpact and Feasibility What modifications would be needed to comply with current limits? nclude any citations. nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern is required to determine the modifications required to comply with water quality standards. How long would it take to implement these changes? 5+ years Estimate the capital cost: Dependent on mitigation or treatment alternative selected to reduce loadings. Estimate additional O & M cost: Dependent on mitigation or treatment alternative selected to reduce loadings. Citations: Long Term Mitigation Evaluation Plan submitted to MPCA Estimate the impact of treatment on the effluent substance concentration, and include any citations: nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern will include consideration of the resulting effluent concentrations for the parameters of concern. dentify any expected environmental impacts that would result from further treatment, and include any citations: nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern will include consideration of the expected environmental impacts. Alternatives are being evaluated (See Long Term Mitigation Evaluation Plan submitted to the MPCA) s it technically and economically feasible for this permittee to modify the treatment process to reduce the level of the substance in the discharge? Yes No Unknown

56 Provide the basis for this conclusion, including citations. f treatment is technically infeasible, provide an analysis of the factors that demonstrates technical infeasibility. f treatment is economically infeasible, provide an analysis of the economic cost to ratepayers that demonstrates economic infeasibility. Attach additional sheets if necessary. Details regarding technical and economical feasibility can be found in the Minnesota Variance Application. S-44 f treatment is possible, is it possible to comply with the limits on the substance? f it is, what prevents this from being done? nclude any citations. Yes No Unknown List any alternatives to current practices that have been considered, and why they have been rejected as a course of action, including any citations: The details of these activities are provided in the Minnesota Variance Application. Section V: Compliance with Water Quality Standards Describe all activities that have been, and are being, conducted to reduce the discharge of the substance into the receiving stream. This may include existing treatments and controls, consumer education, promising centralized or remote treatment technologies, planned research, etc. nclude any citations. As part of short-term mitigation that was conducted as required by the Consent Decree, a seepage collection and pump-back system upstream of SD026 was constructed and placed into operation during the summer of This system significantly decreases the discharge at SD026 by collecting groundwater seepage from the existing pond upstream of SD026 and pumping it to Cell 1E of the Hoyt Lakes Tailings Basin. This short-term mitigation seepage collection and pump-back system will remain in operation during the period of the proposed variance. Further details of these activities are provided in the Minnesota Variance Application. Describe all actions that the permit requires the permittee to complete during the variance period to ensure reasonable progress towards attainment of the water quality standard. nclude any citations. There are no current permit requirements regarding the attainment of the water quality standards for which a variance is sought. Cliffs Erie LLC has proposed a long term mitigation plan to investigate technically and economically feasible methods for permanent mitigation of the parameters of concern. The details of these activities can be found in the Minnesota Variance Application. Section X: Compliance with Previous Permit (Renewals Only) Date of previous submittal: NA first time EPA application Date of EPA approval: NA first time EPA application

57 Previous Permit #: MN Previous WQSTS #: NA first time EPA application Effluent substance concentration: Varies see Minnesota variance request. Variance Limit: NA first time MPCA variance Target value(s): Applicable water quality standards see above Achieved? Yes No Partial For renewals, list previous steps that were to be completed. Show whether these steps have been completed in compliance with the terms of the previous variance permit. Attach additional sheets if necessary. Condition of previous variance Compliance Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Citations:

58 Summary of Endangered or Threatened Species Within 5 Miles of SD026 Common Name Scientific Name MN Status Federal Status NHS Records within 1 Mile NHS Records within 1-2 Miles NHS Records within 2-5 Miles American Bittern Botaurus lentiginosus Tracked* N/A Colonial Water Bird Nesting Site N/A N/A N/A Northern Goshawk Accipiter gentilis Tracked* N/A Lapland Buttercup Ranunculus lapponicus * Note: Species is tracked but not legally protected Species of Special Concern N/A 0 0 1

59 Appendix B EPA nterim Economic Guidance Workbook

60 Worksheet A Pollution Control Project Summary nformation Cliffs Erie, LLC Current Capacity of the Pollution Control System 0.0 MGD There is not currently a pollution control system installed at SD026. This variance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of the parameters of concern. Design Capacity of the Pollution Control System Current Excess Capacity Expected Excess Capacity after Completion of Project Projected Groundbreaking Date Projected Date of Completion (see previous) (see previous) 0.0 MGD 0.0% TBD TBD TBD Please describe the pollution control project being proposed below. As described in this Variance Application for SD026, CE has been actively pursuing alternatives to meet the water quality standards, including completion of several studies focused on the identification and evaluation of viable mitigation and/or treatment technologies and has developed a process to identify the most appropriate alternative. However, additional time is required to test, evaluate and implement a viable solution. Therefore, the type of pollution control system that will be implemented at SD026 is yet to be determined. (Please refer to Section Technological Feasibility of the Variance Application for further details) Please describe the other pollution control options considered, explaining why each options was rejected. Please refer to Section Technological Feasibility and Appendix C of the Variance Application for further details related to the pollution control options both currently under consideration and that have been eliminated from consideration.

61 Worksheet G Calculation of Total Annualized Project Costs Cliffs Erie, LLC Capital costs to be financed ($) 3 $6,900,000 (1) nterest rate for financing (%) Time period of financing (Assume 10 years 1 ) 3.5% (i) 10 (n) Annualization factor = i/([(1 + i) n - 1] + i) (2) Annualized capital cost [(1) (2)] $829,665 (3) Annual cost of operation and maintenance (including but not limited to monitoring, inspection, permitting fees, waste disposal charges, $270,000 (4) repair, administration and replacement) ($) 2,3 Total annual cost of pollution control project [(3) + (4)] $1,100,000 (5) Notes: 1 While actual payback schedules may differ across projects and companies, assume equal annual payments over a 10-year period for consistency in comparing projects. 2 For recurring costs that occur less frequently than once a year, pro rate the cost over the relevant number of years (e.g., for pumps replaced once every three years, include one-third of the cost each year). 3 These costs assume treatment by lime softening as a representative of the cost of potential pollution control systems. Please note that this does not indicate that lime softening is a viable, effective, or appropriate treatment technology for SD026; additional time is required to test, evaluate and implement a viable solution at SD026. Guidance Documentation Component Section Page Verify Project Costs 3.1.a 3-2 Capital Cost to be Financed 3.1.a; 3.1.b 3-2; 3-3 Annual Cost of Operation and Maintenance 3.1.b 3-3 nterest Rate for Financing 3.1.b 3-3 Time Period for Financing 3.1.b 3-3

62 Data Needed to Calculate the Primary and Secondary ndicators (for Worksheets H,, J, K, & L) Cliffs Erie, LLC Applicant Name Three most recently completed fiscal years (most recent first): 2011 Cliffs Erie, LLC Revenues ($) $0 $0 $0 Cost of Goods Sold (including the cost of materials, direct labor, indirect labor, rent and heat) ($) $0 $0 $0 Portion of Corporate Overhead Assigned to the Discharger (selling, general, administrative, interest, R&D expenses, and depreciation on common -$14,157,808 $3,994,792 $1,490,769 property) ($) Net ncome after Taxes ($)* $14,157,808 -$3,994,792 -$1,490,769 Depreciation ($) $0 $0 $0 Current Assets (the sum of inventories, prepaid expenses, and accounts receivable) ($) $25,272,774 $3,983,776 $3,647,055 Current Liabilities (the sum of accounts payable, accrued expenses, taxes, and the current portion of long-term debt) ($) $1,139,288 $3,660,827 $1,896,962 Current Debt ($) $0 $0 $0 Long-term Debt ($) $0 $0 $0 Long-term Liabilities (long-term debt such as bonds, debentures, and bank debt, and all other noncurrent liabilities such as deferred income taxes) ($)* $15,724,177 $14,986,879 $13,444,532 Owner Equity (the difference between total assets and total liabilities, including contributed or paid in capital and retained earnings) ($)* $12,157,638 $8,080,317 $16,287,671 Note: * 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in Guidance Documentation Component Section Page Financial mpact Analysis (overview) Current Assets 3.2b 3-7 Current Liabilities 3.2b 3-8

63 Worksheet H Calculation of Earnings Before Taxes With and Without Pollution Control Project Costs Cliffs Erie, LLC A. Earnings Without Pollution Control Project Costs EBT = R - CGS - CO Where: EBT = R = CGS = CO = Earnings Before Taxes Revenues Cost of Goods Sold (including the cost of materials, direct labor, indirect labor, rent and heat) Portion of Corporate Overhead Assigned to the Discharger (selling, general, administrative, interest, R&D expenses, and depreciation of common property) Three Most Recently Completed Fiscal Years R $0 $0 $0 (1) CGS $0 $0 $0 (2) CO -$14,157,808 $3,994,792 $1,490,769 (3) EBT [(1) - (2) - (3)] $14,157,808 -$3,994,792 -$1,490,769 (4) Considerations: Have Earnings Before Taxes changed over the three year period? f so, what would a "typical" year's EBT be? Explain below was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in This income stream was approximately $3.0 million annual in 2010 and $1.5 million annual in 2009, and was related to the asset sales that were concluded in With the financial impact of these asset sales removed, Earnings Before Taxes (EBT) for each of the years would be approximately: 2011: -$2.3 million (loss), 2010: -$7.0 million (loss), 2009: -$3.0 million (loss).

64 (Worksheet H cont.) B. Earnings with Pollution Control Project Costs EWPR = EBT - ACPR Where: EWPR = EBT = ACPR = Earnings with Pollution Control Project Costs Earnings Before Taxes (4) Total Annual Costs of Pollution Control Project [Worksheet G, (5)] EBT (4) ACPR [Worksheet G, (5)] EWPR [(5) - (6)] The Most Recently Completed Fiscal Year 2011 $14,157,808 (5) $1,100,000 (6) $13,057,808 (7) Considerations: Will earnings be positive after paying the annual cost of pollution control? No Additional comments: Earnings will not be positive when comments in (A) above are considered. Guidance Documentation Component Section Page Profitability 3.2.a 3-6

65 Worksheet Calculation of Profit Rates With and Without Pollution Control Project Costs Cliffs Erie, LLC A. Profit Rate Without Project Costs Where: PRT = EBT = R = PRT = EBT R Profit Rate Before Taxes Earnings Before Taxes Revenues Three Most Recently Completed Fiscal Years EBT [Worksheet H, (4)] $14,157,808 -$3,994,792 -$1,490,769 (1) R [Worksheet H, (1)] $0 $0 $0 (2) PRT [(1) / (2)] (3) Considerations: How have profit rates changed over the three years? Cliffs Erie LLC is a non-operating mining entity. The only significant income stream for Cliffs Erie LLC in the past has come from the sale of its assets. Once the assets of value have all been sold, much of which has already happened by 2011, Cliffs Erie will stop generating any income at all. Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the most recent year typical of the three years? No, use t is more representative of a 'typical' year. How do these profit rates compare with the profit rates for this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity.

66 (Worksheet cont.) B. Profit Rate With Pollution Control Costs Where: PRPR = EWPR = R = The Most Recently Completed Fiscal Year 2011 EWPR [Worksheet H, (7)] $13,057,808 (4) R [Worksheet H, (1)] $0 (5) PRPR [(4) / (5)] 0.00 (6) PRPR = EWPR R Profit Rate with Pollution Control Costs Before-Tax Earnings With Pollution Control Costs Revenues Considerations: What would be the percentage change in the profit rate for the most recent year due to pollution control costs? [(PRPR - 0% How does the Profit Rate with Pollution Control Costs compare to the profit rate of this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity. s there ability to raise prices to cover some or all of the pollution control costs? Explain below: Not applicable. Cliffs Erie LLC is a non-operating entity. Component Revenues Profitability (overview) Comparison to Similar Line of Business nterpretation of Profit Test Earnings Before Taxes Effect of Pollution Control on Profit Potential to Raise Prices Guidance Documentation Section 3.1b 3.2.a 3.2.a 3.2.a 3.2.a 3.2.a 3.2.a Page

67 Worksheet J Calculation of the Current Ratio Cliffs Erie, LLC Where: CR = CA = CL = CR = CA CL Current Ratio Current Assets (the sum of inventories, prepaid expenses, and accounts receivable) Current Liabilities (the sum of accounts payable, accrued expenses, taxes, and the current portion of long-term debts) Three Most Recently Completed Fiscal Years CA $25,272,774 $3,983,776 $3,647,055 (1) CL $1,139,288 $3,660,827 $1,896,962 (2) CR [(1) / (2)] (3) Considerations: s the most recent year typical of No, use t is more representative of a 'typical' the three years? year's ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the current ratio (3) greater than 2.0? No How does the current ratio (3) compare with the current ratios for other firms in this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Liquidity (overview) Current Ratio Current Assets Current Liabilities nterpretation of Current Ratio Comparison to Similar Lines of Business Section 3.2.b 3.2.b 3.2b 3.2b 3.2.b 3.2.b Page

68 Worksheet K Calculation of Beaver's Ratio Cliffs Erie, LLC Where: BR = CF = TD = BR = CF TD Beaver's Ratio Cash Flow Total Debt Three Most Recently Completed Fiscal Years Net income after taxes $14,157,808 -$3,994,792 -$1,490,769 (1) Depreciation $0 $0 $0 (2) CF [(1) + (2)] $14,157,808 -$3,994,792 -$1,490,769 (3) Current debt $0 $0 $0 (4) Long-term debt $0 $0 $0 (5) TD [(4) + (5)] $0 $0 $0 (6) BR [(3) / (6)] (7) Considerations: s the most recent year typical of the No, use t is more representative of a three years? 'typical' year's ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the Beaver's Ratio greater than 0.2? s the Beaver's Ratio less than 0.15? s the Beaver's Ratio between 0.2 and 0.15? No Yes No How does this ratio compare with the Beaver's Ratio for other firms in the same business? Not applicable. Cliffs Erie LLC is a non-operating entity. Component Solvency (overview) Beaver's Ratio nterpretation of Beaver's Ratio Comparison to Similar Lines of Business Guidance Documentation Section Page 3.2.b b b b 3-10

69 Worksheet L Debt to Equity Ratio Cliffs Erie, LLC Where: DER = LTL = OE = DER = LTL OE Debt/Equity Ratio Long-Term Liabilities (long-term debt such as bonds, debentures, and bank debt, and all other noncurrent liabilities such as deferred income taxes) Owner Equity (the difference between total assets and total liabilities, Three Most Recently Completed Fiscal Years LTL $15,724,177 $14,986,879 $13,444,532 (1) OE $12,157,638 $8,080,317 $16,287,671 (2) DER [(1) / (2)] (3) Considerations: s the most recent year typical of No, use t is more representative of a 'typical' year's the three years? ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in How does the debt to equity ratio (3) compare with the ratio for firms in the same business? Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Leverage (overview) Debt/Equity Ratio Owner Equity nterpretation of Debt/Equity Ratio Comparison to Similar Dischargers mpact of Special Sources of Funding Section 3.2b 3.2b 3.2b 3.2.b 3.2.b 3.2.b Page

70 Financial Analysis Summary Cliffs Erie, LLC Entity Annual Pollution Control Costs Most Recently Completed Fiscal Year Profit Rate Without Pollution Controls Profit Rate With Pollution Controls Percent Change in Profit Rate Due to Pollution Controls Cliffs Erie, LLC $1,100, % Note: 1. Based on the most recently completed fiscal year (2011) Cliffs Erie, LLC Typical Value for Facilities/Firms in Similar Lines of Business Note: 2. Based on a typical fiscal year (2010) Primary Measure: Profit Test 1 Comparison with Typical Values for Facilities/Firms in Similar Line of Business 2 Entity Primary Measure: Profit Test (Profitability) Current Ratio (Liquidity) Secondary Measures Beaver's Ratio (Solvency) Debt/Equity Ratio (Leverage) Summarize and discuss financial circumstances with and without pollution controls, and compare primary and secondary measures with the corresponding typical values for facilities/firms in similar lines of business. Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Financial mpact Analysis (overview) Primary Measure (profitability) Secondary Measures nterpreting the Results Measuring Substantial mpacts (flowchart) Section Page a b Figure

71 Worksheet N Factors to Consider in Making a Determination of Widespread Social and Economic mpacts Cliffs Erie, LLC Define the affected community in this case; what areas are included Cliff Erie's Hoyt Lakes Mine Area is located north of the City of Hoyt Lakes in Sections 1, 2, 11-16, and of Township 59 North, Range 14W, Saint Louis County, Minnesota. Employees, contractors and suppliers live in the nearby community as well as other communities on the ron Range, including Aurora, Biwabik, Gilbert, McKinley, Eveleth, and Virginia, and in unincorporated areas of St. Louis County. (1) Current unemployment rate in affected community ([Current # of persons collecting unemployment in affected community / labor force in affected community], or, if unavailable, current unemployment rate provided in Tab 9.) (%) Current national unemployment rate (%) Additional number of persons expected to collect unemployment in affected community due to compliance with water quality standards (#) Expected unemployment rate in the affected community after compliance with water quality standards ([Current # of persons collecting unemployment in affected community + (4)] / labor force in affected community) (%) Median household income in affected community ($) Total number of households in affected community (#) Percent of population below the poverty line in affected community (%) Current expenditures on social services in affected community ($) Expected expenditures on social services due to job losses in the affected community ($) Current total tax revenues in the affected community ($) Refer to Table N-1 (2) 7.9%* (3) Less than 10 (4) (5) Refer to Table N-2 (6) Refer to Table N-3 (7) Refer to Table N-4 (8) Refer to Table N-5 (9) (10) Refer to Table N-6 (11)

72 (Worksheet N cont.) Tax revenues paid by the private entity to the affected community ($) Tax revenues paid by the private entity as a percentage of the affected community's total tax revenues (%) * Current statewide unemployment rate ([Current # of persons collecting unemployment in state] / labor force in state], or, if unavailable, current statewide unemployment rate provided in Tab 9.) (%) Additional number of persons expected to collect unemployment in the state due to compliance with water quality standards (#) Expected statewide unemployment rate, after compliance with water quality standards ([Current # of persons collecting unemployment in state + (15)]/labor force in state) Current expenditures on social services in state ($) Expected statewide expenditures on social services due to job losses ($) (12) (13) 5.8%* (14) (15) (16) $8,312,488,593** (17) (18) Other current community characteristics or anticipated impacts that are not listed in the worksheet: Notes: * Bureau of Labor Statistics seasonally adjusted value for October 2012 ( accessed December 3, 2012) ** 2005 Human Services Enrollment and Services Spending ( accessed December 3, 2012) Guidance Documentation Component Section Page Affected Community Unemployment Rates Labor Force Expenditures on Social Services Tax Revenues Multiplier Effect Consideration of Economic Bene

73 Table N-1: Unemployment rate in affected community mpact area Unemployment Rate (%) Source Aurora Biwabik Eveleth Gilbert Hoyt Lakes McKinley Town of White Virginia St. Louis County Minnesota Total N/A 4.4 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 11.9 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 7.6 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 16.3 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 15 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) N/A 10.5 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 6.5 Bureau of Labor Statistics not seasonally adjusted preliminary value for December 2011 ( accessed February 27, 2012) 5.7 Bureau of Labor Statistics seasonally adjusted value for December 2012 ( accessed February 27, 2011)

74 Table N-2: Median household income in affected community Aurora mpact area Median Household ncome (2010 nflation Adjusted Dollars) N/A Year/Source Biwabik $ 37,500 Eveleth $ 36,755 Gilbert $ 40,925 Hoyt Lakes $ 45,338 McKinley $ 27,750 Town of White N/A Virginia $ 32,664 St. Louis County $ 44,941 Minnesota Total $ 55,459 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

75 Table N-3: Number of households in affected community mpact area Number of households Year/Source Aurora Biwabik 523 Eveleth 1,779 Gilbert 861 Hoyt Lakes 912 McKinley 27 Town of White Virginia 4,028 St. Louis County 86,561 Minnesota Total 2,091,548 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

76 Table N-4: Percent of population living below poverty level in affected community Aurora mpact area Percent below poverty level (%) Year/Source Biwabik 18.7 Eveleth 18.8 Gilbert 11.0 Hoyt Lakes 4.5 McKinley 15.9 Town of White Virginia 21.2 St. Louis County 17.9 Minnesota Total 11.6 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

77 Table N-5: Expenditures on social services in affected community mpact area Social Services Expenditures Aurora $ 1,414,513 Biwabik $ 1,201,311 Eveleth $ 4,134,077 Gilbert $ 2,087,466 Hoyt Lakes $ 2,620,085 McKinley $ 55,428 Town of White Virginia $ 9,830,928 St. Louis County $ 217,734,620 Minnesota Total $ 8,312,488,593 Year/Source STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota County Budgets 2010 Summary Budget Data Together With 2009 Revised Summary Budget Data, 2009 revised budget data for current expenditures, ( accessed February 27, 2012) 2005 Human services enrollment and services spending( accessed February 27, 2012)

78 Table N-6: Current total tax revenues in affected community mpact area 2009 U.S. Dollars Year/Source Aurora $ 665,617 Biwabik $ 653,040 Eveleth $ 871,281 Gilbert $ 557,802 Hoyt Lakes $ 939,945 McKinley $ 2,242 Town of White N/A Virginia $ 2,499,175 St. Louis County $ 108,028,005 Minnesota Total $ 17,726,000,000 STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota County Budgets 2010 Summary Budget Data Together With 2009 Revised Summary Budget Data, 2009 revised budget data for property taxes and all other taxes, ( accessed February 27, 2012) FY 2011 Estimate ( accessed February 27,2012)

79 Appendix C Summary: Comprehensive Review of Potential Treatment Technologies for SD026

80 Appendix C Summary: Comprehensive Review of Potential Treatment Technologies for SD026 Through the process of developing the Short-Term Mitigation Evaluation and mplementation Plan for SD026 (Short-Term Plan) and the Long-Term Mitigation Evaluation and mplementation Plan for SD026 (Long-Term Plan), CE has undertaken a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD026. The following potential treatment technologies were screened in development of the Short-Term Mitigation Evaluation and mplementation Plan for SD026: Biological Treatment: constructed wetlands, floating wetlands, natural wetlands, biofilters, in-pit biological treatment, and anaerobic reactors Chemical Precipitation: barium precipitation, ettringite precipitation (SAVMN and CESR), gypsum precipitation, and lime softening on Exchange: Sulf-X and Sulf-XC Membrane Treatment: microfiltration, ultrafiltration, nanofiltration, reverse osmosis, and electrodialysis reversal The following potential treatment technologies were screened in development of the Long-Term Mitigation Evaluation and mplementation Plan for SD026: Floating Wetland Treatment Permeable Reactive Barrier (PRB) on Exchange (Sulf-X or Sulf-XC) Reverse Osmosis Nanofiltration Natural Attenuation Enhanced Natural Attenuation through Nutrient Addition Aquatic System and Surface Flow Wetlands Based on the results of these screenings, the following potential treatment technologies were evaluated further based on effectiveness, implementability, long-term performance, and cost: Floating Wetland o Summary of review: After review of potential biological treatment alternatives during development of the Short-Term Plan, a floating wetland system was selected for

81 further evaluation, as described in Section of the Short-Term Plan. Section 5.2 of the Short-Term Plan includes a description of the floating wetland system, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, the floating wetland system was selected for further evaluation, as described in Sections and 4.3 of the Long-Term Plan. Section 5.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of a floating wetland system. Section 6.0 of the Long-Term Plan recommended further evaluation a floating wetland system. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD026: Section 5.1.1: Biological Treatment Section 5.2: Floating Wetlands Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.1.1: Floating Wetland Treatment Section 4.3: Floating Wetland Treatment Section 5.0: Comparison of Mitigation Alternatives Section 6.0: Recommended Protocol Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives Lime Softening o Summary of review: After review of potential chemical precipitation treatment alternatives during development of the Short-Term Plan, no chemical precipitation alternative was deemed suitable for independent consideration due to potential limitations, as described in Section of the Short-Term Plan. However, limesoftening was selected for further consideration and potential evaluation with other treatment technologies as either a pre- or post-treatment option. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD026: Section 5.1.2: Chemical Precipitation Table 2: Treatment Screening Matrix

82 Long-Term Mitigation Evaluation and mplementation Plan for SD026: Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives on Exchange (Sulf-X) o Summary of review: After review of potential ion exchange treatment alternatives during development of the Short-Term Plan, BioteQ Environmental Technologies, nc. s proprietary Sulf-X ion exchange process was selected for further evaluation, as described in Section of the Short-Term Plan. Section 5.3 of the Short-Term Plan includes a description of the Sulf-X ion exchange process, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, the Sulf-X ion exchange system was not selected for further evaluation due primarily to concerns related to implementability, as described in Section of the Long- Term Plan. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD026: Section 5.1.3: on Exchange Section 5.3: on Exchange Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.1.3: on-exchange Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives Membrane Treatment (Reverse Osmosis) o Summary of review: After review of potential membrane treatment alternatives during development of the Short-Term Plan, reverse osmosis was selected for further evaluation, as described in Section of the Short-Term Plan. Section 5.4 of the Short-Term Plan includes a description of reverse osmosis, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, reverse osmosis was not selected for further evaluation due primarily to concerns related to implementability, as described in Section of the Long-Term Plan. However, in the MPCA s July 25, 2012 letter to CE, RE: April 6, 2010, Cliffs Erie, LLC Consent

83 Decree, Review of Long Term Plans SD033 and SD026, the MPCA indicated that, further evaluation of an active treatment technology, such as membrane treatment, would be required; therefore a Work Plan for nvestigation of Membrane Treatment at SD026 was submitted to the MPCA in September The work plan includes a proposed schedule and protocol for conducting a pilot-scale test including evaluation of reverse osmosis technology and evaluation of associated concentrate (brine) management approaches and the use of concentrate volume reduction technologies. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD026: Section 5.1.4: Reverse Osmosis Section 5.4: Reverse Osmosis Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.1.4: Reverse Osmosis and Nanofiltration Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives Work Plan for nvestigation of Membrane Treatment at SD026: Section 1.2: Selection of Reverse Osmosis as Active Treatment Technology and Testing Approach Natural Attenuation o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, natural attenuation was identified for further evaluation, as described in Sections and 4.1 of the Long-Term Plan. Section 5.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of natural attenuation. Section 6.0 of the Long-Term Plan recommended natural attenuation for further evaluation; however, based on subsequent correspondence with the MPCA, natural attenuation was removed from further evaluation. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.2.1: Natural Attenuation Section 4.1: Natural Attenuation

84 Section 5.0: Comparison of Mitigation Alternatives Section 6.0: Recommended Protocol Section 6.1.1: Natural Attenuation Evaluation Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives Enhanced Natural Attenuation o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, enhanced natural attenuation through nutrient addition was identified for further evaluation, as described in Sections and 4.2 of the Long-Term Plan. Section 5.0 of the Long- Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of enhanced natural attenuation. Section 6.0 of the Long-Term Plan recommended further evaluation of enhanced natural attenuation through benchscale and pilot-scale testing. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.2.2: Enhanced Natural Attenuation through Nutrient Addition Section 4.2: Enhanced Natural Attenuation Section 5.0: Comparison of Mitigation Alternatives Section 6.0: Recommended Protocol Section 6.1.2: Enhanced Natural Attenuation and Lagoon/Surface- Flow Wetland Studies Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives Surface-Flow Wetland/Lagoon o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, a surface-flow wetland system was identified for further evaluation, as described in Sections and 4.4 of the Long-Term Plan. Section 5.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of a surface-flow wetland system. Section 6.0 of the Long-Term Plan recommended for

85 further evaluation of a surface-flow wetland system through bench-scale and pilotscale testing. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD026: Section 3.2.3: Aquatic System and Surface Flow Wetlands Section 4.4: Aquatic System and Surface Flow Wetland Section 5.0: Comparison of Mitigation Alternatives Section 6.0: Recommended Protocol Section 6.1.2: Enhanced Natural Attenuation and Lagoon/Surface- Flow Wetland Studies Table 3: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives

86 5.0 SD033 Variance Application (Updated) P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\Overall Variance Addendum (Updated ).docx 7

87 Variance Application NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD033 Prepared for Cliffs Erie LLC April 2012 Updated: December 10, 2012

88 Variance Application NPDES/SDS Permit Renewal Permit No. MN Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD033 Prepared for Cliffs Erie LLC April 2012 Updated: December 10, West Superior Street Duluth, MN Phone: (218) Fax: (218)

89 Cliffs Erie Hoyt Lakes Mining Area Surface Discharge Station SD033 Variance Application NPDES/SDS Permit Renewal Permit No. MN April 2012 Updated: December 10, 2012 Table of Contents 1.0 Variance Application Minn. Rule Part , Subp Name and Address of the Applicant Signature of the Applicant Description of Facility for which Variance is being Sought Nature of the Variance Sought Parameters for which Variance is Requested Period of Time for which Variance is Requested Reasons Relied upon by the Applicant in Requesting the Variance Economic Burden Technological Feasibility Other Data or nformation Required by Rule or Standard Other Relevant Data or nformation Required by Agency General Description of Materials Discharged, Nature of Materials and Proposed Methods for Control Proposed Plan to Reduce Emission Levels to Lowest Possible Effect on Air, Water and Land Resources which will Result from Approval of Variance Statement of Alternatives to Proposed Operation which have been Considered Effects from Denial of Variance Variance Requirements Relative to Minn. Rule Part and United States Environmental Protection Agency (EPA) Facility Specific Variance Application References P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx i

90 List of Tables Table 1 SD033 Parameters of Concern Water Quality Summary (2005 through 2011)... 2 Table 2 Flow Contributions by Source to SD Table 3 Effectiveness, mplementation, and Cost nformation for Potential Treatment Technologies at SD Table 4 SD033 Proposed nterim Period Limits Table 5 Relative Salt Tolerance of Various Cultivated Plants* Table 1 SD033 Parameters of Concern Water Quality Summary (2005 through 2011)... 2 Table 2 Flow Contributions by Source to SD Table 3 SD033 Proposed nterim Period Limits Table 4 Relative Salt Tolerance of Various Cultivated Plants* 19 List of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 General Site Layout SD033 SD033 onic Composition Water Quality Data: Bicarbonate Water Quality Data: Hardness, Total Water Quality Data: Specific Conductance Water Quality Data: Total Dissolved Solids List of Appendices Appendix A Appendix B EPA Facility Specific Standard Variance Data Sheet EPA nterim Economic Guidance Worksheets: Worksheet A: Pollution Control Project Summary nformation Worksheet G: Calculation of Total Annualized Project Costs Data Needed to Calculate the Primary and Secondary ndicators (for Worksheets H,, J, K, and L) Worksheet H: Calculation of Earnings before Taxes with and without Pollution Control Projects Costs Worksheet : Worksheet J: Calculation of Profit Rates with and without Pollution Control Project Costs Calculation of the Current Ratio Worksheet K: Calculation of the Beaver s Ratio Worksheet L: Debt to Equity Ratio P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx ii

91 Appendix C Financial Analysis Summary Worksheet N: Factors to Consider in Making a Determination of Widespread Social and Economic mpacts Summary: Comprehensive Review of Potential Treatment Technologies for SD033 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx iii

92 1.0 Variance Application The northern portion of the former LTV Steel Mining Company (LTVSMC) Mining Area 5 discharges water to the Embarrass River watershed. The discharge is administered under Minnesota Pollution Control Agency (MPCA) National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit MN (Permit). The Permit is currently held by Cliffs Erie LLC (CE). The current Permit was issued May 4, 2001, expired November 30, 2005, and was last modified on May 6, n accordance with Chapter of the Permit, a complete NPDES permit application was submitted to the MPCA on February 28, While there are other discharges/outfalls authorized under the Permit, this variance application is specific to Outfall SD033. ron mining operations in the Area 5 pits ceased in approximately 1988 and the facility is currently in closure. The area 5NE pit does not have a surface water discharge, but has substantial subsurface flow to the Area 5NW pit through the road base between the pits. Discharge from the northern portion of Area 5NW forms the headwaters of Spring Mine Creek, which flows north (via surface discharge station SD033) to the Embarrass River. Spring Mine Creek is an unlisted water and as such, has the default beneficial use classifications of 2B, 3C, 4A, 4B, 5, and 6, as described in Minnesota Rule Chapter The parameters discussed in this variance application are total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance (parameters of concern). Although monitoring is required in the current Permit for total dissolved solids (TDS), bicarbonate (alkalinity) and specific conductance, there are no applicable effluent limits listed for these parameters at this monitoring station. Monitoring is also required for carbonate hardness (as CaCO 3 ) in the current Permit, although there is no applicable water quality standard. While monitoring for total hardness (Ca + Mg as CaCO 3 ) is not required for SD033 under the current Permit, monitoring for this parameter has been conducted and is elevated relative to the water quality standard. t is important to note that while there is no monitoring requirement for total hardness in the current Permit (i.e.., only carbonate hardness monitoring is required in the current Permit), this variance request is intended to address total hardness. Table 1 presents a summary of the water quality data for these parameters at SD033 from January 2005 through December 2011 based on the analytical results from the monthly Discharge Monitoring P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 1

93 Reports (DMRs) as reported by CE in accordance with the Permit. The discharge at SD033 has elevated specific conductance, TDS, bicarbonates (alkalinity) and hardness relative to the water quality standard. The primary constituents contributing to the elevated specific conductance and TDS include sulfate, hardness (calcium and magnesium), and bicarbonate. Table 1 SD033 Parameters of Concern Water Quality Summary (2005 through 2011) Parameter of Concern Data Availability Time Period Average Concentration Maximum Concentration Water Quality Standard Alkalinity, Bicarbonates as CaCO 3 (mg/l) Hardness, Total (mg/l) ,166 1, Total Dissolved Solids (mg/l) 2008 a ,800 2, Specific Conductance (µmhos/cm) ,178 3,000 1,000 Sulfate (mg/l) ,099 2, a Data are not available for TDS prior to CE has been performing studies and implementing a series of corrective actions to mitigate the elevated concentrations of the parameters of concern as soon as possible. For SD033, these efforts have included developing and implementing the following: Short-Term Mitigation Evaluation and mplementation Plan for SD033: The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD033 was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD033 in the short term. The Short-Term Mitigation Evaluation and mplementation Plan for SD033 was completed in 2010 (Barr, 2010b). NPDES Field Studies Plan SD033 and NPDES Field Studies Report SD033: The field studies consisted of a year-long monitoring program. The objectives of the NPDES Field Studies Plan SD033 (Barr, 2010a) were to collect data to: o Determine surface and groundwater flow patterns in the Area 5NE, 5NW Pits and adjacent stockpiles; o Determine the likely source or sources of elevated sulfate in SD033; o Assess the impact of the elevated sulfate in SD033 on wild rice stands and methylmercury concentration in receiving waters of the discharge; P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 2

94 o Assess the impact of elevated total dissolved solids, carbonate hardness and specific conductance in SD033 on the water quality and aquatic life (fish and macroinvertebrates) of receiving waters of the discharge; and o Collect additional data to support continued evaluation of treatment alternatives. The field studies were completed in 2011 (Barr, 2011a). Bench Testing: Bench testing was completed for both a permeable reactive barrier (PRB) and for a floating wetland. The bench testing results were reported in Permeable Reactive Barrier Bench Test Report SD033 (Barr, 2011b) and Floating Wetland Bench Test Report SD033 (Barr, 2011c). Long-Term Mitigation Evaluation and mplementation Plan for SD033: The objective of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 is to investigate technically and economically feasible methods and technologies for permanent mitigation of the elevated concentrations of the parameters of concern in SD033 with a focus on source elimination/minimization and passive treatment. The Long-Term Mitigation Evaluation and mplementation Plan for SD033 (Barr, 2012a) was completed in April This plan, combined with the Short-Term Mitigation Evaluation and mplementation Plan for SD033, constitutes a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD033. Work Plan for nvestigation of Membrane Treatment at SD033: n addition to the Long-Term Mitigation Evaluation and mplementation Plan for SD033, a Work Plan for nvestigation of Membrane Treatment at SD033 (Barr, 2012b) was submitted to the MPCA in September This work plan includes a proposed schedule and protocol for conducting a pilot-scale test of membrane (reverse osmosis) treatment for SD033. While CE has been pursuing a solution to reduce the concentrations of the parameters of concern, additional time is required to test, evaluate and implement a viable solution. CE requests a variance from the water quality standards for TDS, bicarbonates (alkalinity), total hardness, and specific conductance at SD033 to provide sufficient time to evaluate and implement potential source mitigation and water treatment strategies to meet water quality standards. This variance application is submitted in accordance with Minn. Rules Part subpart 2 and Minn. Rules part and P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 3

95 1.1 Minn. Rule Part , Subp. 2 Minnesota Rules (Variances) provides in relevant part: Subp. 2. n no case shall the board or commissioner grant a variance unless a written application has been made to the board or commissioner. The application must be served upon the commissioner. Subsections through provide the information required by MN Rules , Subpart 2, A. through H Name and Address of the Applicant A. Name and address of the applicant and the person who prepared the application. Applicant Cliffs Erie LLC Craig Hartmann, Area Manager Facilities P.O. Box 900 Hoyt Lakes, MN Person Who Prepared the Application Barr Engineering Company 4700 West 77 th Street Minneapolis, MN Signature of the Applicant B. The signature of the applicant or authorized representatives. Craig Hartmann Area Manager Facilities Cliffs Erie LLC P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 4

96 1.1.3 Description of Facility for which Variance is being Sought C. A description, including the location, of the business, plant, system, or facility for which a variance is sought. The CE facility is located primarily in sections 1, 2, and of T59N, R14W, St. Louis County, near Hoyt Lakes, Minnesota. Mining operations at LTVSMC (now Cliffs Erie LLC) ceased in 2001 and the site is currently inactive and some closure activities are underway. Currently, the facility is covered by an approved Closure Plan which states The overall objective of the Closure Plan is to develop the site as a brownfield location for a future mineral processing/industrial site. Significant taconite reserves remain in the area and it may be possible to utilize the facilities as a base for construction of a direct steel making operation. n addition, several Cu/Ni deposits are located to the east of the plant. One company is proposing reuse of portions of the facility, which may lead to the development of a Cu/Ni mine and value added metals plant in the area. n either case, the presence of the facility would also make an excellent heavy industrial site. The Closure Plan and details have been developed in cooperation with the MDNR, MPCA and other local governments and agencies as appropriate. The Closure Plan will be available at the MDNR offices in Hibbing and St. Paul and at the MPCA offices in St. Paul. n general, all environmental hazards will be remediated, inactive pit areas closed, all buildings and structures not part of the brownfield development will be demolished, and all associated sites reclaimed and vegetated. The crushing/concentrating facilities, shops, warehouses, offices, railroad/dock and all utilities at the site will be left in place as part of the brownfield site. n the absence of brownfield development, these structures will be demolished and the land reclaimed. The current principal activity at this facility is the maintenance and closure of an open pit taconite mine, which is currently inactive. Figure 1 presents a general layout of the site. The facility consists of mine pits; stockpile areas; haul roads, railways, and railroad yards; plant areas; material and equipment storage areas; and non-domestic wastewater treatment systems. Surface drainage from the stockpiles, haul roads, building areas and storage sites at the facility flows to: the mine pits; Wyman Creek and unnamed creek tributary to Colby Lake and the Partridge River; Second Creek (also known as Knox Creek); Spring Mine Creek to the Embarrass River; and unnamed wetlands tributary to these creeks. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 5

97 While iron mining in the Area 5 pits ceased in approximately 1988, a large volume of water remain in the Area 5NE and 5NW pits. Flow and water quality at SD033 are influenced by these pits, surrounding stockpiles, runoff, and shallow groundwater. Gravity drainage from the northern portion of Area 5NW contributes to culvert Outfall SD033, forming the headwaters of Spring Mine Creek, which flows north to the Embarrass River. Spring Mine Creek is an unlisted water and as such, has the default beneficial use classifications of 2B, 3C, 4A, 4B, 5, and 6, as described in Minnesota Rule Chapter Based on the flow measurements at SD033 from August 2010 through June 2011, as reported in the NPDES Field Studies Report SD033 (Barr, 2011a), the discharge rate has ranged from a low of approximately 160 gallons per minute (gpm) to a high of approximately 1,115 gpm, with an average observed flow of approximately 400 gpm. The flow of Spring Mine Creek at SD033, unlike many other streams in the area, has a strong component of baseflow or constant, year-round flow. This characteristic is due to the fact that the majority of the SD033 watershed does not contribute water directly to the stream at SD033 but rather flows to the Area 5NE and Area 5NW Pits. Outflow from the Area 5NW Pit follows the relic Spring Mine Creek channel under waste rock stockpiles and surfaces just upstream from SD033. This subsurface flow into and out of the mine pits is relatively constant and does not stop in the winter, allowing the channel just downstream of SD033 to remain ice-free year round. The sources of water that contribute to the SD033 discharge were evaluated as part of the field studies conducted in The relative contribution to flow at SD033 from each water source is shown in Table2. Direct contributions to SD033 that do not pass through the Area 5 pits represent 22% of the total flow, with the remainder split between the watersheds of Area 5NE Pit (45%) and Area 5NW Pit (33%). The largest source of water (by land-use type) is shallow groundwater from the stockpiles and haul roads (32% of the total flow at SD033), which has the potential to contribute loading of parameters of concern to the discharge. Approximately 25% of the total flow at SD033 originates from direct precipitation on the pits or runoff and shallow groundwater from undisturbed areas, which are expected to be minor sources of loading. The NPDES Field Studies Report SD033 (Barr, 2011a) determined that the rock stockpiles are the primary source for the sulfate load and parameters of concern at SD033. Using mean sulfate concentrations, an estimated 80 percent of the total sulfate load at SD033 is derived from stockpiles. The report also concluded that sulfide depletion cannot be expected prior to 100 years from now and would likely take considerably longer. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 6

98 Table 2 Flow Contributions by Source to SD033 Source Area 5NE Area 5NW SD033 Total* Direct Net precipitation (Open 4% 8% - 12% Water) Undisturbed Runoff 2% 3% 3% 8% Undisturbed Shallow GW 1% 2% 2% 5% Stockpile/Road Runoff 5% 3% 2% 10% Stockpile/Road Shallow GW 12% 6% 15% 32% Pit Wall Runoff 13% 3% - 16% Deep Groundwater (GW) 8% 8% - 16% Total* 45% 33% 22% 100% *Values may not sum exactly due to rounding Nature of the Variance Sought D. The nature of the variance sought, including an identification of the applicable rules or standards from which a variance is sought, the period of time for which it is sought, and the reasons relied upon by the applicant in requesting the variance Parameters for which Variance is Requested CE requests a variance from the water quality standards for total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance (parameters of concern) at SD033. While there are no effluent limits listed in the current Permit, the water quality standards were assumed to be potentially applicable effluent limits because Outfall SD033 forms the headwaters of Spring Mine Creek (Class 2B, 3C, 4A, 4B, 5, and 6 waters). The water quality standards define the goals for a water body by designating its highest attainable uses and setting the criteria that protect those uses. Based on the monitoring data, the discharge at SD033 has elevated concentrations of these parameters relative to the potentially applicable water quality standards from Minnesota Rules Chapter : Hardness mg/l Class 3C (industrial cooling and materials transport) and Minnesota Rules Chapter : Bicarbonates 5 meq/l (250 mg/l as CaCO 3 ) Class 4A (irrigation) Specific conductance 1,000 µmhos/cm Class 4A (irrigation) P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 7

99 TDS 700 mg/l Class 4A (irrigation) Table 1 presents a summary of the water quality at SD033 and compares the water quality standards to the current water quality data for SD033. The primary constituents contributing to the elevated specific conductance and TDS include, sulfate, hardness (calcium and magnesium), and bicarbonate. Figure 2 illustrates the major anions and cations that are contributing to the TDS of the discharge at SD033. As Figure 2 illustrates, sulfate is a significant contributor to the TDS and represents over 60 percent of the TDS based on average concentrations. The sulfate concentration also impacts specific conductance, so while sulfate is not the subject of this variance request, it will need to be addressed to meet the TDS standard. Comparisons between the monitoring data for the parameters of concern at SD033 and the water quality standards for Spring Mine Creek are shown in Figures 3 through 6. As discussed above, the current Permit contains no permit limits for any of the parameters of concern and monitoring is only required for TDS, bicarbonates (alkalinity) and specific conductance. Monitoring for total hardness (Ca + Mg as CaCO 3 ) is not required by the current Permit; however, monitoring for carbonate hardness (as CaCO 3 ) is required. While a Consent Decree between MPCA and CE was issued in April 2010 and required CE to begin evaluating potential treatment technologies, meeting a permit limit equivalent to the water quality standard for each of the parameters of concern is substantially different than any limit CE has been required to comply with Period of Time for which Variance is Requested CE requests this variance remain in effect for the duration of the reissued permit (no less than five years) Reasons Relied upon by the Applicant in Requesting the Variance CE requests a variance from the water quality standards for total dissolved solids (TDS), bicarbonates (alkalinity), total hardness, and specific conductance at SD033 based on the following: t is not feasible to immediately implement a remedy to effectively mitigate or treat the parameters of concern (TDS, bicarbonates, total hardness, and specific conductance) to the applicable water quality standards. A variance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of the parameters of concern. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 8

100 The cost of an active system would be a substantial burden to this nonoperational facility. Passive long-term mitigation alternatives are not only the most compatible with this site, but also the most economically feasible. The results of the field studies indicate that there are no anticipated significant impacts related to water uses, or to air or land resources. The basis for these reasons are presented in the paragraphs below. ron mining operations in the Area 5 pits ceased in approximately Because the SD033 discharge is from existing pits, groundwater and runoff, and the primary source of sulfate and the parameters of concern are from the rock stockpiles, there are no process changes that can be made to alter the discharge to meet the water quality standards. Thus, water treatment and/or source mitigation will be required to achieve the required reductions. While hardness and bicarbonates are common water constituents which can be removed by processes such as chemical precipitation, ion exchange, and membrane filtration, analysis of the overall composition of the water discharged at SD033 indicates that sulfate (a monovalent ion) is a significant contributor to the concentration of TDS and specific conductance. Reduction of this parameter will be necessary to meet water quality standards for TDS and specific conductance. CE has been actively pursuing a viable treatment/mitigation technology for SD033 since April A Short-Term Mitigation and mplementation Plan for SD033 has been implemented and a Long- Term Mitigation and Evaluation and mplementation Plan for SD033 has been developed. The focus of these plans is to identify, test and evaluate alternative mitigation or treatment measures. Each of these plans is discussed in more detail below. The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD033 was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD033 during the period the field studies were conducted. The conclusion of this report was that the treatment alternatives evaluated required significant time for bench testing, pilot testing, and fullscale implementation, along with significant capital and annual operation and maintenance costs, and that they could not be readily implemented to meet the water quality standards. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 9

101 The Long-Term Mitigation Evaluation and mplementation Plan for SD033 was completed with the objective of identifying and evaluating alternatives that could potentially mitigate/reduce the existing elevated concentrations of sulfate and the parameters of concern in SD033 over the long-term, building on the work completed as part of the Short-Term Mitigation Evaluation and mplementation Plan, NPDES Field Studies- SD033 and bench testing. Combined, these documents constitute a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD033. The alternatives identified and evaluated in Long-Term Mitigation Evaluation and mplementation Plan for SD033 include mitigation measures that over the long-term would limit the concentrations of dissolved solids in the SD033 discharge by reducing the loading of sulfate and parameters of concern from the stockpiles and pits. Section 6.4 of the Long-Term Mitigation Evaluation Plan for SD033 presents a summary of the effectiveness, implementability and cost considerations relative to the alternatives to address the parameters of concern at SD033. Based on this evaluation, source mitigation (through source isolation of stockpile materials) is recommended as a technically and economically viable technology for further evaluation and potential installation for the long-term management of the discharge. For this alternative (and most of the others), both pre-implementation study efforts and a pilot-scale testing phase are required to verify effectiveness and provide input to a design prior to full-scale implementation. Additionally, CE has agreed to conduct further evaluation of an active treatment technology, membrane treatment (reverse osmosis), in accordance with the Work Plan for nvestigation of Membrane Treatment at SD033 submitted to the MPCA in September CE has also proposed to conduct further evaluation of an additional passive treatment technology, a permeable reactive barrier (PRB), as described in CE s September 25, 2012 letter to the MPCA (CE, 2012a). As with the mitigation measures and passive treatment systems identified in the Long-Term Mitigation Evaluation and mplementation Plan for SD033, pilot-scale testing phases for both membrane treatment and the permeable reactive barrier are required to verify effectiveness and provide input to a design prior to potential full-scale implementation. Section 7.3 of the Long-Term Mitigation Evaluation Plan for SD033 presents a proposed milestone schedule for implementation of the recommendations provided in that plan and Section 3.4 of the Work Plan for nvestigation of Membrane Treatment at SD033 presents a proposed milestone schedule specific to membrane treatment; a revised schedule for the currently proposed passive treatment evaluations was submitted with CE s November 29, 2012 letter to the MPCA (CE, 2012b). 10 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx

102 Treatment of the SD033 discharge to the water quality standards is technologically feasible, however, as concluded in the Long-Term Mitigation and mplementation Plan for SD033 (Section 7.3), time will be required for bench testing, pilot testing and full-scale implementation of technically and economically feasible methods for permanent mitigation of the elevated parameters. The estimated costs of implementing each of the alternatives considered are presented in Table 3Section 6.4 of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 and discussed further in Section The estimated expenses associated with identifying and implementing an effective long-term treatment technology to reduce each of the parameters (including sulfate as required to meet the TDS standard) to such a level that full compliance with water quality standards is consistently achieved, will result in a significant economic burden. The facts supporting each basis (economic and technical) are presented in the sections below. While the concentrations of specific conductance, TDS, bicarbonates (alkalinity) and hardness at SD033 are elevated relative to the water quality standards, and this discharge would continue throughout the evaluation and implementation of a long-term mitigation technology, granting this variance will not impair the existing beneficial uses or the level of water quality necessary to protect the beneficial uses of the receiving stream, as documented in the results presented in NPDES Field Studies Report SD033. The results of these studies support continued discharge at the current concentrations while a long-term solution is identified and implemented. Additional information on the impacts of the SD033 discharge is presented in Section Economic Burden E. f the applicant seeks a variance primarily on the grounds of economic burden, financial statements prepared or approved by a certified public accountant, or other person acceptable to the agency, which shall fairly set forth the status of the business, plant, system, or facility for each of the three financial years immediately preceding the year of the application, and an analysis of the effect of such financial status if the variance is not granted. While the cost of treating the discharge from SD033 to reduce the parameters of concern is not the primary sole grounds for requesting this variance, the economic impact of the various treatment systems should be considered. This facility is inactive and not producing a product. Closure activities at the facility have begun and CE has on-going financial responsibilities associated with these activities. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 11

103 CE s goal is to progress toward elimination/reduction of the source of the elevated concentrations of the parameters of concern, providing for the potential redevelopment of the site. As stated in Section , passive (non-mechanical) long-term mitigation and source mitigation alternatives are not only the most compatible with this site, but also the most economically feasible. While there may be active (or mechanical) treatment alternatives that would reduce the concentration of the parameters of concern, they would require operation and maintenance costs in perpetuity. While it is not possible to know the financial situation of a potential redevelopment enterprise, the perpetual financial responsibility of on-going treatment would likely render this site economically infeasible for redevelopment. Table 3 of this document and Section 6.4 of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 presents an overview of the effectiveness, implementability, dependability, and cost considerations relative to the alternatives to address the parameters of concern at SD033. The estimated costs represent an estimate of the total cost of each technology as a net present value (20 years, 3.5% discount rate) and are considered conceptual level costs or Class 5 estimates (according to the Association for the Advancement of Cost Engineering nternational) and as such should only be used for comparing the relative value of the technologies evaluated. The estimated net present values of the active treatment alternatives range from $23,900,000 for membrane treatment to $62,500,000 for membrane treatment (reverse osmosis), while the net present values of the passive treatment alternatives range from $1,700,000 for natural attenuation to $37,200,000 for a permeable reactive barrier. These significant differences in net present value further demonstrate that a passive treatment alternative would be more economically feasible than an active treatment alternative. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 12

104 Table 3 Effectiveness, mplementation, and Cost nformation for Potential Treatment Technologies at SD033 S-44 Effectiveness in Meeting Water Quality Standards mplementation Considerations Estimated Costs 7,8 Alternative Sulfate Bicarbonate Hardness Total Dissolved Solids Specific Conductivity Suitability for Closed Site nvestigations Required Capital Cost Annual O&M Cost Net Present Value 6 Source solation 2,3 High Requires additional cover materials evaluation and bench or pilot testing prior to full-scale implementation $ 10,400,000 $ 71,000 $ 10,900,000 Natural Attenuation 2 High Can be implemented in the near future, monitoring only $ 170,000 $ 105,000 $ 1,700,000 Enhanced Natural Attenuation 2 High Can be implemented in the near future, monitoring only $ 890,000 $ 480,000 $ 7,300,000 Permeable Reactive Barrier 2 High Requires hydraulics and siting evaluations and pilot testing prior to full scale implementation $ 35,800,000 $ 98,000 $ 37,200,000 Floating Wetland 2 Medium Requires hydraulics and siting evaluations and pilot testing prior to full scale implementation $ 12,400,000 $ 720,000 $ 22,300,000 Surface Flow Wetland/Lagoon 2,4 Medium Requires hydraulics and siting evaluations and pilot testing prior to full scale implementation $ 3,500,000 $ 120,000 $ 5,100,000 Lime Softening (+ Floating Wetland) 1,5 Low Requires hydraulics, siting evaluations and bench testing prior to full scale implementation $ 21,700,000 $ 1,110,000 $ 37,500,000 on Exchange (modified Sulf-X) 1 Low Requires hydraulics, siting evaluations, bench testing, and pilot testing prior to full scale implementation $ 16,300,000 $ 1,400,000 $ 36,200,000 Membrane Treatment (Nanofiltration) 1,9 Low Requires hydraulics, siting evaluations and pilot testing of membranes and brine concentrate management prior to full scale implementation $ 9,700,000 $ 1,000,000 $ 23,900,000 Membrane Treatment (Reverse Osmosis) 1,10 Low Requires hydraulics, siting evaluations and pilot testing of membranes and brine concentrate management prior to full scale implementation $ 20,700,000 $ 2,800,000 $ 62,500,000 Notes: 1. Cost for this option only includes treatment of the parameters of concern (does not specifically include treatment of sulfate to 10 mg/l). 2. Cost for this option includes treatment of sulfate in addition to the parameters of concern; however, treatment of sulfate to 10 mg/l is unproven. 3. Capital cost provided is for an 85-acre geosynthtic clay liner-type cover. Actual cost depends on size and type of cover to be implemented (e.g. capital costs for a 85-acre soil cover are estimated at $3,400,000, while capital costs for a 190-acre geomembranetype cover may be $32,000,000). 4. Not intended to be operated as a stand-alone process. The wetland/lagoon would be coupled with the floating wetland for removal of sulfate. Cost presented is the added cost of this process. 5. Not intended to be operated as a stand-alone process. Lime softening technology would need to be coupled with another technology such as a floating wetland for removal of sulfate years, 3.5% 7. These cost estimates are considered conceptual level costs or Class 5 estimates (according to the Association for the Advancement of Cost Engineering nternational), and should only be used for comparing the relative value of the technologies evaluated in this Plan. The typical associated level of accuracy of Class 5 cost estimates is ±25 to 100%. 8. Costs may vary from those presented in previously submitted Plans, due to additional information obtained during interim periods. 9. Nanofiltration may be capable of achieving compliance for parameters of concern, but not capable of reducing sulfate concentrations to 10 mg/l. 10. Costs shown for reverse osmosis were developed for the Short-Term Mitigation Evaluation and mplementation Plan for SD033 and have not been recalculated to reflect revised (lower) flow estimates at SD033 (revised lower based on the results from subsequent field studies.) This cost includes treatment of sulfate to 10 mg/l. Key: Likely to be effective in meeting the water quality standard at end-of-pipe Ability to meet water quality standard uncertain or requires additional testing to demonstrate Unable to meet water quality standard at end-of-pipe

105 While CE is not requesting this variance primarily solely on the grounds of economic burden, the cost of an active treatment system would will be a substantial burden to a nonoperational facility. Furthermore, Wwhile it is not possible to know the financial situation of a potential redevelopment enterprise, the perpetuallong-term financial responsibility of on-going active treatment wouldwill likely be a consideration renderin the this site economically in feasibilitye for redevelopment. The additional time required to continue to evaluate the technological and economic feasibility of these potential treatment alternatives is critical. To aid in the determination of economic burden as it relates to this variance request, CE has provided additional financial information in Appendix B via the worksheets associated with the EPA nterim Economic Guidance Workbook (EPA-823-B ; March 1995). Specifically, the contents of each worksheet are as follows: Worksheet A contains the rationale and approach to provide additional treatment to the water quality standards for the pollutants for which variance are being sought. Worksheet G contains the annualized costs using the methods from the EPA nterim Economic Guidance. Worksheets H through L provide information related to the financial impact to CE of not granting the variance. Worksheet N provides information on other factors to consider in making a determination of widespread social and economic impacts to the surrounding area. n addition to the information presented in the worksheet CE purchases approximately $1.5 million of services from various industries (utilities, consultants, equipment vendors, mechanical services, etc.) throughout northern Minnesota. f the CE NPDES permits are not re-issued, future development at this site will not be possible. Therefore, the following are at risk: o Future employment in Northeastern Minnesota associated with potential new mining operations at the CE site o County and state tax revenues o Mining royalties to the county and state o Spin off industries impacted by mining As stated previously, CE s Hoyt Lakes Mine Area was formerly owned and operated by LTV Steel Mining Company (LTVSMC) and was purchased by CE in 2001 after LTVSMC declared bankruptcy and ceased operation of the mine. When operation of the mine ceased, 1,500 workers lost their jobs; this had a major effect on the economy of the mining towns of Hoyt Lakes and Aurora and the P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 14

106 surrounding rural area. Mesabi Nugget, which is located west of this property on land that was also formerly owned by LTVSMC, has restored approximately 120 jobs to the area. While this was a positive move, it barely begins to offset the significant economic hardship in this area. Potential future redevelopment would bring more jobs to the area both directly and through demand for other services; however, this development may be constrained unless a variance applicable to the outfall is granted. As an example of a potential project dependent on reissuance of the Hoyt Lakes Mine Area NPDES/SDS Permit, in a report prepared for PolyMet by the Labovitz School of Business and Economics, NorthMet Economic mpact 2011 Update; Economic mpact of PolyMet s NorthMet Project on St. Louis County, Minnesota, the economic impact of the proposed NorthMet project on the region includes: 360 direct mining jobs; 330 jobs in related dependent industries; 300 jobs dependent on household spending; Annual payroll spending of almost $330 million; Approximately $515 million impact of mining output, or sales, on St Louis County; and During peak construction approximately 800 jobs, $247 million in payroll taxes and $490 million in sales impact Technological Feasibility F. f the applicant seeks a variance on grounds that compliance is not technologically feasible, a report from a registered professional engineer, or other person acceptable to the agency, stating fully the reasons why compliance is not technologically feasible. Treatment of the SD033 discharge to the water quality standards is expected to be technologically feasible, however, as concluded in the Short-Term Mitigation and mplementation Plan for SD033 and the Long-Term Mitigation and mplementation Plan for SD033, time will be required for bench testing, pilot testing and full-scale implementation of potentially technically feasible methods for permanent mitigation of the elevated parameters. The primary basis of this variance application is that meeting the water quality standards for the parameters of concern is not technologically feasible by the next anticipated permit reissuance date. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 15

107 Hardness and bicarbonates are common water constituents that can be removed by processes such as chemical precipitation, ion exchange, and membrane filtration. Analysis of the overall composition of the water discharged at SD033 indicates that sulfate (a monovalent ion) is a significant contributor to the concentration of TDS and reduction of this parameter will be necessary to reduce the TDS to the concentrations necessary to meet water quality standards. So, while sulfate is not the subject of this variance request, significant reduction of this parameter will be required to address the TDS and specific conductance concentrations. Removal of sulfate (and thus TDS and specific conductance) is not as easily accomplished and bench and pilot testing will be required prior to full-scale implementation of an alternative. The objective of the Short-Term Mitigation Evaluation and mplementation Plan for SD033 (completed in 2010) was to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern in SD033 during the period the field studies were conducted. The conclusion of this evaluation was that all of the treatment alternatives evaluated required significant time for bench testing, pilot testing and full-scale implementation, along with significant capital and annual operation and maintenance costs, and that they could not be readily implemented to meet the water quality standards. The objective of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 (Barr, 2012a) is to identify and evaluate alternatives that could potentially mitigate/reduce the existing elevated concentrations of sulfate and the parameters of concern in SD033 over the long-term, building on the work completed as part of the Short-Term Mitigation Evaluation and mplementation Plan for SD033, NPDES Field Studies- SD033 and bench testing. The alternatives identified and evaluated in Long-Term Mitigation Evaluation and mplementation Plan for SD033 include mitigation measures that over the long-term would limit the concentrations of dissolved solids in the SD033 discharge by reducing the loading of sulfate and other parameters of concern created at the stockpiles and in the pits. The alternatives evaluated included source mitigation, natural attenuation, enhanced natural attenuation, permeable reactive barrier (PRB), floating wetland, and a surface- flow wetland/lagoon. The alternatives were evaluated against the following criteria: effectiveness, implementability, longterm performance, and cost. Section 6.4 of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 presents a summary of the options evaluated for SD033. Based on P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 16

108 this evaluation, the following next steps were recommended for implementation of mitigation activities at SD033: Source mitigation and floating wetland treatment are potentially viable technologies proposed for further evaluation and potential installation for the long-term management of the discharge. For these two technologies, both pre-implementation study efforts and a pilotscale testing phase are outlined in the Long-Term Mitigation Evaluation and mplementation Plan. The hydrogeologic and topographic suitability of the site for a PRB will be evaluated in accordance with MPCA recommendations. The placement of enhanced natural attenuation through in-pit treatment will also be considered, with the inclusion of a bathymetric survey during the pre-implementation studies. The use of natural attenuation as a mitigation technology will be considered as a solution over the long-term, upon successful implementation of source mitigation. Treatment of the other parameters of concern with a lagoon and surface-flow wetland will be further evaluated based on the results of floating wetland and source mitigation studies and testing. n the MPCA s July 25, 2012 letter to CE (MPCA, 2012), the MPCA indicated that further evaluation of an active treatment technology, such as membrane treatment, would also be required. This evaluation is in addition to the evaluation of passive treatment technologies at SD033 (as proposed in the Long-Term Mitigation Evaluation and mplementation Plan for SD033). Therefore, a Work Plan for nvestigation of Membrane Treatment at SD033 was submitted to the MPCA in September This work plan included a proposed schedule and protocol for conducting a pilot-scale test of membrane treatment of SD033. Specifically, the pilot-scale test plan includes evaluation of reverse osmosis technology and evaluation of associated concentrate (brine) management approaches and the use of concentrate volume reduction technologies. CE has also proposed to conduct further evaluation of an additional passive treatment technology, a permeable reactive barrier (PRB), as described in CE s September 25, 2012 letter to the MPCA (CE, 2012a). During the development of the Short-Term Mitigation Evaluation and mplementation Plan for SD033 (Barr, 2010b) and the Long-Term Mitigation Evaluation and mplementation Plan for SD033 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 17

109 (Barr, 2012a), CE has undertaken a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD033. This comprehensive review included: A literature review of mitigation/treatment technologies for the parameters of concern and sulfate (Barr, 2010b; Section 3.0). Preliminary screening of potential mitigation/treatment alternatives based on preliminary assessments of effectiveness, implementability, and cost to identify a limited number of potentially feasible alternatives for detailed evaluation (Barr, 2010b; Section 5.1 and Table 2). Conceptual development of a plan for implementation of mitigation/treatment systems for the parameters of concern and sulfate that could be applied to the discharge at SD033 (Barr, 2010b; Section 4.0 and Sections 5.2 through 5.4). Evaluation of the feasibility of the mitigation/treatment technologies that were selected from the preliminary screening process based on effectiveness, implementability, and cost (Barr, 2010b; Section 5.0). Additional screening of potential mitigation alternatives for long-term implementation including a review of the technologies included in the preliminary screening (Barr, 2012a; Section 4.0). Detailed evaluation of mitigation/treatment technologies that may prove effective for implementation at SD0336 for removal of the parameters of concern and sulfate (Barr, 2012a; Section 5.0). Evaluation of the feasibility of implementing the mitigation/treatment technologies based on effectiveness, implementability, long-term performance, and cost (Barr, 2012a; Section 6.0 and Table 7). Recommendations for implementation (Barr, 2012a; Section 7.0). Based on the results of the screening processes, the following potential treatment technologies were evaluated further based on effectiveness, implementability, long-term performance, and cost: Source isolation Natural attenuation Enhanced natural attenuation Permeable reactive barrier Floating wetland P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 18

110 Surface-flow wetlands/lagoon Lime softening on exchange (Sulf-X) Membrane treatment (reverse osmosis) Table 3 summarizes the evaluation of effectiveness, implementability, and cost for each of these potential treatment technologies. Appendix C contains: Further details related to the review and evaluation of the potential treatment technologies and references to the information sources. Further details related to each of the potential treatment technologies selected for further evaluation. Based on this comprehensive review of potential treatment technologies for SD033, CE has selected four potential treatment technologies for further evaluation through pilot testing: Floating wetlands Source isolation Permeable reactive barrier Membrane treatment (reverse osmosis). Proposed milestone schedules were developed as part of the Long-Term Mitigation Evaluation and mplementation Plan for SD033 and the Work Plan for nvestigation of Membrane Treatment at SD033. n total, the pre-implementation studies, design of the pilot systems, and operation of the pilot testing is expected to occur over the course of the next permit cyclea minimum of three to four years, not including time for agency review and approval of work plans submitted throughout the process. The complete implementation of full scale mitigation for SD033 (including design and construction) could potentially be completed in approximately six years, again not including time for agency review and approvals. A The proposed milestone-based schedule for the testing and implementation of mitigation at SD033 is outlined in in Section 7.3 of the Long-Term Mitigation Evaluation and mplementation Plan for SD033; a revised schedule for the currently proposed passive treatment evaluations was submitted with CE s November 29, 2012 letter to the MPCA (CE, 2012b). P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 19

111 1.1.7 Other Data or nformation Required by Rule or Standard G. Other additional data or information that is required by any applicable agency rule or standard. No additional data has been required by the MPCA Other Relevant Data or nformation Required by Agency H. Any other relevant data or information that the board or the commissioner deems essential to a determination on the application, including, but not limited to the following: General Description of Materials Discharged, Nature of Materials and Proposed Methods for Control 1. A general description of the materials handled or processed by the applicant that are pertinent to the subject application, and a statement of the nature and quantity of the materials being discharged, emitted, or disposed of, and that can reasonably be expected to be discharged, emitted, or disposed of during the period of the proposed variance, and proposed methods for the control of these materials. A general description of the facility and SD033 discharge characteristics is provided in Section Additional summaries of the water quality data are included in are included in the Hoyt Lakes Mine Area NPDES/SDS Supplemental Permit nformation package, which is being submitted in conjunction with this variance request. As presented in NPDES Field Studies Report SD033, the elevated concentration of the parameters of concern are a result of dissolution of reactive minerals associated with the mined Biwabik ron Formation (BF) contained in stockpiles and exposed mine pit walls. The sulfate and parameters of concern at SD033 are derived from one or more of the following potential source areas: 1) mine rock stockpiled in the Area 5NE and Area 5NW pits (now partially submerged), 2) mine rock stockpiled at the surface in the areas surrounding the Area 5NE and Area 5NW pits or adjacent to Spring Mine Creek upstream of SD033, and 3) pit wall rock. This report also concluded that based on assumptions regarding sulfate content in the waste rock stockpiles, and the field-derived sulfide oxidation rate calculated for similar nearby stockpiles on another mining project, sulfide depletion cannot be expected prior to 100 years from now, and would very likely take considerably longer. Because the SD033 discharge is from existing stockpiles, pits, groundwater and runoff, there are no process changes that can be made to eliminate the discharge or reduce the concentration of the parameters of concern in the discharge. The proposed method of control is to continue the pursuit of source mitigation through implementation of the recommendations presented in the Long-Term P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 20

112 Mitigation Evaluation and mplementation Plan for SD033. Therefore, passive technologies that have lower need for maintenance and monitoring are given preference over mechanical technologies Proposed Plan to Reduce Emission Levels to Lowest Possible 2. A comprehensive proposed plan indicating the steps to be taken by the applicant during the period of the variance, even if the applicant is seeking a permanent variance, to reduce the emission levels or discharges to the lowest limits practical. As presented in the sections above, the SD033 discharge is from existing stockpiles, pits, groundwater and runoff and there are no process changes that can be made to eliminate the discharge or reduce the concentration of the parameters of concern in the discharge. CE has been actively pursuing alternatives to meet the water quality standards including completion of several studies focused on the identification and evaluation of viable mitigation and/or treatment technologies and has developed a well-designed and focused process to identify the most appropriate alternative. The most recent report, Long-Term Mitigation Evaluation and mplementation Plan for SD033, recommended the following next steps for implementation of mitigation activities at SD033: Further evaluation and potential installation of source mitigation and floating wetland treatment systems for the long-term management of the discharge. For both of these technologies, both pre-implementation study efforts and a pilot-scale testing phase are required to verify effectiveness and provide input to a design prior to full sale implementation. Further evaluation of the hydrogeologic and topographic suitability of the site for potential PRB implementation. Consideration of the placement of enhanced natural attenuation through in-pit treatment, with the inclusion of a bathymetric survey during the pre-implementation studies. Upon successful implementation of source mitigation, consideration of the use of natural attenuation as a mitigation technology over the long-term. Further evaluation of treatment with a lagoon and surface-flow wetland based on the results of floating wetland and source mitigation studies and testing. Section 7.0 of the Long-Term Mitigation and mplementation Plan for SD033 outlines a process for implementing the report recommendations. A proposed milestone schedule for implementation of the pre-implementation studies, pilot testing, and full-scale implementation (if appropriate) was P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 21

113 developed and a revised schedule for the currently proposed passive treatment evaluations was submitted on November 29, 2012 and was presented as discussed in Section Additionally, as discussed in Section 1.1.6, CE has agreed to conduct further evaluation of an active treatment technology, membrane treatment (reverse osmosis), in accordance with the Work Plan for nvestigation of Membrane Treatment at SD033 submitted to the MPCA in September This work plan includes a proposed schedule and protocol for conducting a pilot-scale test of membrane treatment of SD033. CE has also proposed to conduct further evaluation of an additional passive treatment technology, a permeable reactive barrier (PRB), as described in CE s September 25, 2012 letter to the MPCA (CE, 2012a). Because there are no process changes that can be made to reduce or eliminate the parameters of concern in the SD033 discharge and there is little to no impact from these parameters on the receiving stream (see Section ), CE proposes new nterim Period Limits consistent with the current water quality for the period of the variance. The proposed nterim Period Limits for each of the parameters of concern are shown in Table 34. These nterim Period Limits are based on a reasonable potential to exceed analysis using available monitoring data from January 2005 through December 2011 with a 99-percent confidence interval, consistent with the US EPA s Technical Support Document for Water Quality-Based Toxics Control (US EPA, 1991). This is the level currently achievable at the SD033 discharge. Table 34 SD033 Proposed nterim Period Limits Parameter of Concern Proposed nterim Period Limits (Daily Max and Monthly Average) Water Quality Standard Alkalinity, Bicarbonates as CaCO 3 (mg/l) Hardness (mg/l) 2, Total Dissolved Solids (mg/l) 2, Specific Conductance (µmhos/cm) 3,765 1, Effect on Air, Water and Land Resources which will Result from Approval of Variance 3. A concise statement of the effect upon the air, water, and land resources of the state and upon the public and other persons affected, including those residing in the area where the variance will take effect, which will result from board or commissioner approval of the requested variance. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 22

114 Air mpacts Because hardness, total dissolved solids, bicarbonates and specific conductance are all the result of dissolved minerals in the water, there are no expected air impacts. The minerals will remain dissolved in the water at the temperatures and chemistry at which Spring Mine Creek and the Embarrass and St. Louis Rivers flow. Therefore, there will not be any air impacts from SD033 if a variance for the parameters of concern is granted. Water mpacts A year-long field study (NPDES Field Studies Report SD033) was conducted to characterize and assess the water quality and biological condition of streams directly adjacent and downstream of outfall SD033. Testing was completed on the receiving water Spring Mine Creek and a nearby control stream Bear Creek. Water quality sampling and Whole Effluent Toxicity (WET) testing were conducted to evaluate whether the groups of constituents originating from SD033 have toxic properties. Biological monitoring, consisting of both aquatic invertebrates and fish, was also conducted to determine the effect of discharges from SD033. Biological monitoring is important because it highlights the true in-stream effect of a given discharge and is able to separate the chemical effect from the habitat effect. A habitat evaluation was also conducted as part of the field studies to quantify the difference in habitat quality between the downstream sites and the control sites used in the study. The results of this study indicate that the chemical composition of the water from the permitted outfall SD033 is different from the composition of the receiving water Lower Spring Mine Creek, and is different from waters that served as reference or background sites for the field investigation. As noted, the SD033 discharge has elevated concentrations of the parameters of concern. Whole Effluent Toxicity (WET) Tests The chronic WET test results strongly suggest that it is unlikely that the constituents observed and the concentration of the constituents observed will cause any mortality of aquatic life in Spring Mine Creek (the receiving stream). Reproduction (which is a much more sensitive indicator than mortality) of the test species C. dubia was reduced in two tests compared to the reference site Bear Creek and the Embarrass River. t should be noted that reproduction was not severely reduced in SD033 compared to the reference sites and for one test there was no significant difference between SD033 and the reference sites. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 23

115 WET testing (particularly chronic tests with C. dubia) is a sensitive methodology and the results suggest that the SD033 discharge water is lacking any notable toxicant and the additive or cumulative effects of the constituents present are not significant. A statistical analysis of outfall SD033 water and the receiving waters suggest that reduced reproduction for C. dubia in some tests is not due to toxicity, but rather is largely due to nutrient constituents that are lacking in the SD033 water, including organic carbon, phosphorus, nitrogen, and possibly some trace metals. t does not appear that bicarbonate or hardness are responsible for the WET test results that indicate reproductive differences between water from SD033 and the reference sites. Macroinvertebrates Overall, the macroinvertebrate community in Spring Mine Creek just downstream of outfall SD033 is comparable to the macroinvertebrate community in Bear Creek (the chosen reference site) and there is no evidence that the macroinvertebrate community in Spring Mine Creek is being notably impacted by the discharge as SD033. n Lower Spring Mine Creek there are more sensitive species. t should be noted that the habitat in Upper Spring Mine Creek has better habitat quality (according to the QHE) compared to Bear Creek. Also, some of the more subtle metrics calculated (e.g., percent Simuliidae and percent Diptera, percent Ephemeroptera, Plecoptera, and Tricoptera) suggest that Upper Spring Mine Creek (SD033) has more tolerant species. However, the stream segment assessed at Upper Spring Mine Creek has a much smaller watershed and flow, and hence it is expected that there will be less diversity simply due to the stream size and order. Again, due to the similarity of the macroinvertebrate communities in Bear Creek and Upper Spring Mine Creek, it can be concluded that there is no measurable or noticeable effects on the macroinvertebrate community in Spring Mine Creek due the SD033 discharge. Fish Upper Spring Mine Creek (SD033) did not have fish habitat and was therefore not sampled. The fish community at Lower Spring Mine Creek was comparable to the fish community at the reference site, Bear Creek; Lower Spring Mine Creek fared better than Bear Creek for 4 of the 5 comparable fish community metrics. Overall, Lower Spring Mine Creek had higher species richness and Simpson s diversity and lower proportions of tolerant species and omnivorous species, compared to Bear Creek. The difference in the proportion of insectivorous individuals between Bear Creek and Lower Spring Mine Creek was not considerably high and given that 50% of the species caught at Lower Spring P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 24

116 Mine Creek were insectivores and only 20% were omnivores, the overall trophic structure and composition at Lower Spring Mine Creek was reflective of a stream with minimal disturbance. The absence of any fish individuals with anomalies such as lesions, tumors or eroded fins, further corroborates the finding of no measurable or notable disturbance to the biological community in Lower Spring Mine Creek. Summary of Field Study Results Overall, the results from the Stream nvestigation indicate that while the SD033 discharge water has elevated concentrations of some parameters (e.g., sulfate, bicarbonates, magnesium, calcium), the biological monitoring data for fish and macroinvertebrates indicate no measurable or notable effects in the upstream or downstream portions of Spring Mine Creek, compared to the data from the reference stream (Bear Creek). Downstream River Water Users Municipal Water Treatment Facilities - Based on a review of the water appropriation permits issued by the Minnesota DNR 1, the only municipal user of water in the vicinity of the site is the City of Hoyt Lakes. However, they appropriate water from Colby Lake which does not receive water from Spring Mine Creek. Thus, the City of Hoyt Lakes is not affected by the discharge. There are no municipal users of water downstream of SD033 on Spring Mine Creek or the Embarrass River. ndustrial Water Users Based on a review of the water appropriation permits issued by the Minnesota DNR, there are no industrial uses of Spring Mine Creek or the Embarrass River downstream of the SD033 discharge. There are industrial water users located further downstream on the St Louis River (United Taconite, Tate & Lyle Citric Acid, nc., USG, Minnesota Power, Sappi, Heathmark, nc. and WLSSD) which appropriate water from the St. Louis River. Other Permitted River Water Users There are no appropriations permits for using the water from Spring Mine Creek or the Embarrass River for agricultural irrigation (either crop or livestock watering), or for other uses. Non-Permitted River Water Users No unpermitted users are known to use either Spring Mine Creek or the Embarrass River. 1 P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 25

117 Land Resources Because there are no permitted water appropriations for agricultural purposes (see above), and because there is little if any agriculture in the area, it is unlikely that there will be impacts on row crops, small grains or livestock irrigation. However, there may be unpermitted uses, so potential impacts on a variety of crops, trees and grasses are noted below. Table 4 5 provides a listing of garden crops and fruits that are the most sensitive to salinity: beans, carrots, onions, radishes, strawberries, and raspberries (threshold levels ranging from 400 to 1,000 mg/l). Cabbage, lettuce, peppers, spinach, sweet potatoes, tomatoes, apples, pears, grapes, plums, blackberries, and boysenberries are moderately sensitive to salinity with threshold levels of 500 to 1,300 mg/l. Table 45 Relative Salt Tolerance of Various Cultivated Plants* Non Tolerant (0 1,400 mg/l) Slightly Tolerant (1,400 2,800 mg/l) Nurseries Moderately Tolerant (2,400 5,600 mg/l) Tolerant (5,600 11,200 mg/l) azalea cottoneaster red pine rose sugar maple viburnum white pine apple forsythia linden Norway maple red maple black locust boxwood beet red oak white ash white oak arborvitae juniper Russian olive Truck Gardening begonia blueberry carrot green bean onion pea radish raspberry strawberry cabbage celery cucumber grape lettuce pepper potato snapdragon sweet corn broccoli chrysanthemum geranium marigold muskmelon spinach squash tomato zinnia asparagus Swiss chard Golf Courses creeping bentgrass Kentucky bluegrass perennial ryegrass red fescue nugget Kentucky bluegrass seaside creeping bentgrass alkaline grass * Source: Rosen et al Soil Test nterpretations and Fertilizer Management for Lawns, Turf Gardens, and Landscape Plants P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 26

118 According to this list, there are several trees and shrubs that are described as non-tolerant with plant damage expected at TDS concentrations of 0 to 1,400 mg/l. All other listed trees and shrubs are tolerant of salinity levels over 1,400 mg/l. The list also shows that all grasses are tolerant of salinity levels of over 1,400 mg/l. Given the relatively low population in the area and the short growing season, there does not appear to be a major impact on the land resources which will result from the agency s approval of the requested variance Statement of Alternatives to Proposed Operation which have been Considered 4. A statement of the alternatives to the proposed operation under the variance which have been considered by the applicant. The discharge at SD033 is not associated with a proposed or current operation; rather it is an existing discharge of groundwater seepage and stormwater runoff. The continued occurrence of groundwater seepage and stormwater runoff at this location is independent of any action by CE. CE would continue to proceed with the MDNR-approved Closure Plan. Therefore, there are no alternative operations to consider Effects from Denial of Variance 5. A concise statement of the effect on the establishment, maintenance, operation, and expansion of business, commerce, trade, traffic, and other economic factors that may result from approval and from denial of the requested variance. Compliance with the water quality standard for the parameters of concern at this time would result in substantial economic burden to a closed facility with limited revenue. mplementing a successful remedy prior to the re-issuance of the Permit is not feasible due to the time required to evaluate, test, and implement a viable mitigation and /or treatment technology. Because the source of the discharge at SD033 is stormwater and groundwater seepage, there are no process changes that can be made to eliminate the elevated concentrations for the parameters of concern. Granting a variance during the next permit cycle will allow CE to properly identify, test, design and implement an effective mitigation and/or treatment technology without compromising the environment or public health, safety and welfare. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 27

119 Also, as identified in Section of this document, the perpetual financial responsibility of ongoing treatment would likely render this site economically infeasible for re-development.denial of the variance may jeopardize future economic growth and employment in Northeastern Minnesota. 1.2 Variance Requirements Relative to Minn. Rule Part and n order to receive a variance for a new or expanded discharge in the Lake Superior Basin, relative requirements in Minn. Rules and must be met. Because a variance is not being requested for a GL-pollutant, MN Rule does not apply. Because a variance is not being requested for any bioaccumulative chemicals of concern (BCC) or bioaccumulative substances of immediate concern (BSC), the requirements of MN Rules are not applicable. 1.3 United States Environmental Protection Agency (EPA) Facility Specific Variance Application Please refer to Appendix A for the EPA Facility Specific Standard Variance Data Sheet. P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 28

120 2.0 References Barr Engineering Company (Barr), 2010a. NPDES Field Studies Plan SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. May Barr Engineering Company (Barr), 2010b. Short-Term Mitigation Evaluation and mplementation Plan for SD033, NPDES/SDS Permit No. MN Prepared for Cliffs Erie, LLC and PolyMet Mining nc. June Barr Engineering Company (Barr), 2011a. NPDES Field Studies Report SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2011b. Permeable Reactive Barrier Bench Test Report SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2011c. Floating Wetland Bench Test Report SD033. Prepared for Cliffs Erie, L.L.C. and PolyMet Mining nc. September Barr Engineering Company (Barr), 2012a. Long-Term Mitigation Evaluation and mplementation Plan for SD033, NPDES/SDS Permit No. MN Prepared for Cliffs Erie, LLC and PolyMet Mining nc. April Barr Engineering Company (Barr), 2012b. Work Plan for nvestigation of Membrane Treatment at SD033, NPDES/SDS Permit No. MN Prepared for Cliffs Erie LLC and PolyMet Mining nc. September Cliffs Erie LLC (CE), 2012a. RE: Consent Decree in MPCA v. Cliffs Erie, Court File No. 62CV-O Response to July 25, 2012 MPCA Letter ( Review of Long Term Plans SD033 and SD026 ). September 25, Cliffs Erie LLC (CE), 2012b. RE: April 6, 2010, Cliffs Erie, LLC Consent Decree Response to October 31, 2012 MPCA Letter ( Review of Response to July 25, 2012 MPCA Letter ). November 29, Minnesota Pollution Control Agency (MPCA), RE: April 6, 2010, Cliffs Erie, LLC Consent Decree, Review of Long Term Plans SD033 and SD026. July 25, P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 29

121 Labovitz School of Business and Economics, NorthMet Economic mpact 2011 Update: Economic mpact of PolyMet s NorthMet Project on St. Louis County, Minnesota. January U.S. Environmental Protection Agency (US EPA), Technical Support Document for Water Quality-Based Toxic Control. EPA/505/ March P:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Variance Applications - Updated\5.0 SD033 Variance Application (Updated)\SD033 Variance Application (Updated ).docxP:\Mpls\23 MN\69\ NPDES Reissuance Area 5-Tailings Basin\WorkFiles\NPDES Permitting and Variance\Final Submittal - Mine\Variance SD033\SD033 Variance Application.docx 30

122 Barr Footer: ArcGS 10.0, :30 File: :\Projects\23\69\1072\Maps\Reports\Short_Term_Mitigation_Evaluation_SD033\NPDES_Permitting\Figure 1 General Site Layout.mxd User: arm FSA Aerial Photo SPRNG MNE Spring Mine Creek SD033!. AREA 5NE AREA 5NW AREA 5SE AREA 5SW PETER MTCHELL S-44 Ridge Creek!. Existing Surface Discharges Rivers and Streams DNR Mine Features (2009) Stockpile n-pit Stockpile Mine Pit Tailings Basin 2,000 1, ,000 Feet Figure 1 GENERAL STE LAYOUT SD033 Cliffs Erie, LLC

123 TDS (mg/l) Alkalinity Magnesium Sodium Calcium Other Sulfate Class 4A TDS WQS SD033 TDS Figure 2 SD033 onic Composition

124 500 Figure 3 SD033 Water Quality Data: Bicarbonates 400 Bicarbonates (mg/l) Water Quality Standard = 250 mg/l 100 0

125 1600 Figure 4 SD033 Water Quality Data: Hardness, Total Hardness, Total (mg/l) Water Quality Standard = 500 mg/l

126 3500 Figure 5 SD033 Water Quality Data: Specific Conductance Specific Conductance (µmhos/cm) Water Quality Standard = 1,000 umhos/cm 500 0

127 2400 Figure 6 SD033 Water Quality Data: Total Dissolved Solids (TDS) TDS (mg/l) Water Quality Standard = 700 mg/l

128 Appendix A EPA Facility Specific Standard Variance Data Sheet

129 Facility Specific Standard Variance Data Sheet S-44 Directions: Please complete this form electronically. Record information in the space provided. Select checkboxes by double clicking on them. Do not delete or alter any fields. For citations, include page number and section if applicable. Please ensure that all data requested are included and as complete as possible. Attach additional sheets if needed. Section : General nformation Name of Permittee: Cliffs Erie LLC Facility Name: Cliffs Erie Hoyt Lakes Mining Area Submitted by: Craig Hartmann, Area Manager - Facilities State: Minnesota Substance: Alkalinity bicarbonate as CaCO3, total hardness, total dissolved solids (TDS) and specific conductance Date completed: Permit #: MN WQSTS #: SD033 Duration of Variance Start Date: Permit reissuance date End Date: Duration of the permit (no less than 5 years s this permit a: First time submittal for variance. Renewal of a previous submittal for variance. (Complete Section X) Description of proposed variance: A variance from the water quality standards for Alkalinity bicarbonate as CaCO3, total hardness, total dissolved solids and specific conductance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of these parameters. List names of all who assisted in the compilation of data for this form, including the completion date of their contribution: Cliffs Erie LLC and Barr Engineering - April 2, 2012 Section : Criteria and Variance nformation Water Quality Standard from which variance is sought: Total Hardness 500 mg/l [Class 3C - industrial cooling and materials transport]; Bicarbonates 5 meq/l (250 mg/l as CaCO3), specific conductance 1000 µmhos/cm; TDS 700 mg/l [Class 4A-irrigation] Ambient substance concentration: See below Measured Estimated Default Unknown f measured or estimated, what was the basis? nclude citation. The discharge occurs at the headwaters of Spring Mine Creek. Therefore, the ambient water quality of Spring Mine Creek at the point of the discharge is equivalent to the water quality of the discharge. Average effluent discharge rate: 0.25MGD Maximum effluent discharge rate: 0.25MGD Effluent substance concentration: See Minnesota Measured Estimated Default Unknown Variance Application Table 1 f measured or estimated, what was the basis? nclude citation. Average effluent concentrations were calculated using historical water quality monitoring data from the period of January 2005 through December See the Minnesota variance application. Level currently achievable (LCA): Total Hardness 2,055mg/L* Alk. Bicarb. as CaCO3 465 mg/l* Spec. Conductance 3,765 µmhos/cm* TDS 2,607 mg/l* *Daily Max and Monthly Average effluent concentrations Variance Limit: To be determined. Target value(s): Water quality standards listed above. What data were used to calculate the LCA, and how was the LCA derived? mmediate compliance with LCA is required. The LCAs are based on a reasonable potential to exceed analysis using available monitoring data from January 2005 through December 2011 with a 99-percent confidence interval.

130 Explain the basis used to determine the variance limit (which must be LCA). nclude citation. An RPE calculation was the basis for the proposed LCA. Select all applicable factors applicable as the basis for the variance as provided for by 40 CFR (g). Summarize justification below: See Minnesota variance request Section : Location nformation Counties in which water quality is potentially impacted: St. Louis County, Minnesota Receiving waterbody at discharge point: Spring Mine Creek (headwaters) Flows into what stream / river? Embarrass River How many miles downstream? 4.4 Coordinates of discharge point (UTM UMT Northing , Easting , Zone 15N, Datum NAD 83 or Latitude and Longitude): What are the designated uses associated with this waterbody? Minnesota Class 2B, 3C, 4A, 4B, 5, 6 receiving water (Spring Mine Creek) What is the distance from the point of discharge to the point downstream where the concentration of the substance falls to less than or equal to the chronic criterion of the substance for aquatic life protection? The discharge at SD033 currently meets all chronic criteria applicable to Class 2B waters. Provide the equation used to calculate that distance (include definitions of all variables and identify the values used for the clarification, and include citation): Not applicable. dentify all other variance permittees for the same substance which discharge to the same stream, river, or waterbody in a location where the effects of the combined variances would have an additive effect on the waterbody: To our knowledge there are no existing variance permittees that discharge at a location downstream of Spring Mine Creek that have been granted variances for the same parameters of concern. Please attach a map, photographs, or a simple schematic showing the location of the discharge point as well as all variances for the substance currently draining to this waterbody on a separate sheet. s receiving waterbody on CWA 303 (d) list? f yes, please list the impairments below. Yes No Unknown Section V: Public Notice Has a public notice been given for this proposed variance? Yes No f yes, was a public hearing held as well? Yes No What type of notice was given? Notice of variance included in notice for permit. Separate notice of variance. MPCA public notice process will be Date of public notice: Date of hearing: followed Were comments received from the public in regards to this notice or hearing? Yes No

131 f yes, where can these comments be found? S-44 Section V: Human Health s receiving water designated as a Public Water Supply? Yes No Applicable criteria affected by variance:. dentify any expected impacts that the variance may have upon human health, and include any citations: Not applicable. Section V: Aquatic Life and Environmental mpact Minnesota Class 2 aquatic life and recreation use designations apply to Aquatic life use designation of receiving water: receiving water (Class 2B applies at the discharge point per MN Rules , subp. 2) Applicable criteria affected by variance: Not Applicable dentify any environmental impacts to aquatic life expected to occur with this variance, and include any citations: No environmental impacts are expected see Minnesota Variance Application. List any Endangered or Threatened species known or likely to occur within the affected area, and include any citations: See the attached table which provides the threatened or endangered species within 5 miles of the discharge point (state or federal listed) and approximate distance from the discharge point. Section V: Economic mpact and Feasibility What modifications would be needed to comply with current limits? nclude any citations. nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern is required to determine the modifications required to comply with water quality standards. How long would it take to implement these changes? 5+ years Estimate the capital cost: Dependent on mitigation or treatment alternative selected to reduce loadings. Estimate additional O & M cost: Dependent on mitigation or treatment alternative selected to reduce loadings. Citations: Long Term Mitigation Evaluation Plan submitted to MPCA Estimate the impact of treatment on the effluent substance concentration, and include any citations: nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern will include consideration of the resulting effluent concentrations for the parameters of concern. dentify any expected environmental impacts that would result from further treatment, and include any citations: nvestigation of technically and economically feasible methods for permanent mitigation of the parameters of concern will include consideration of the expected environmental impacts. Alternatives are being evaluated (See Long Term Mitigation Evaluation Plan submitted to the MPCA) s it technically and economically feasible for this permittee to modify the treatment process to reduce the level of the substance in the discharge? Yes No Unknown

132 Provide the basis for this conclusion, including citations. f treatment is technically infeasible, provide an analysis of the factors that demonstrates technical infeasibility. f treatment is economically infeasible, provide an analysis of the economic cost to ratepayers that demonstrates economic infeasibility. Attach additional sheets if necessary. Details regarding technical and economical feasibility can be found in the Minnesota Variance Application. S-44 f treatment is possible, is it possible to comply with the limits on the substance? f it is, what prevents this from being done? nclude any citations. Yes No Unknown List any alternatives to current practices that have been considered, and why they have been rejected as a course of action, including any citations: The details of these activities are provided in the Minnesota Variance Application. Section V: Compliance with Water Quality Standards Describe all activities that have been, and are being, conducted to reduce the discharge of the substance into the receiving stream. This may include existing treatments and controls, consumer education, promising centralized or remote treatment technologies, planned research, etc. nclude any citations. Cliffs Erie LLC has completed a Short Term Mitigation Plan to investigate readily available and proven, applicable, technically and economically feasible methods and technologies to partially or completely mitigate the elevated concentrations of the parameters of concern at SD033. The details of these activities can be found in the Minnesota Variance Application. Describe all actions that the permit requires the permittee to complete during the variance period to ensure reasonable progress towards attainment of the water quality standard. nclude any citations. There are no current permit requirements regarding the attainment of the water quality standards for which a variance is sought. Cliffs Erie LLC has proposed a long term mitigation plan to investigate technically and economically feasible methods for permanent mitigation of the parameters of concern. The details of these activities can be found in the Minnesota Variance Application. Section X: Compliance with Previous Permit (Renewals Only) Date of previous submittal: NA first time EPA application Date of EPA approval: NA first time EPA application

133 Previous Permit #: MN Previous WQSTS #: NA first time EPA application Effluent substance concentration: Varies see Minnesota variance NA first time MPCA Variance Limit: request. variance Target value(s): Applicable water quality standards see above Achieved? Yes No Partial For renewals, list previous steps that were to be completed. Show whether these steps have been completed in compliance with the terms of the previous variance permit. Attach additional sheets if necessary. Condition of previous variance Compliance Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Yes No Citations:

134 Summary of Endangered or Threatened Species Within 5 Miles of SD033 Common Name Scientific Name MN Status Federal Status NHS Records within 1 Mile NHS Records within 1-2 Miles NHS Records within 2-5 Miles Colonial Water Bird Nesting Site N/A N/A N/A Northern Goshawk Accipiter gentilis Tracked* N/A Bog Rush Juncus stygius var. Species of Special americanus Concern N/A Club-spur Orchid Plantanthera clavellata Species of Special Concern N/A Clustered Bur-reed Sparganium glomeratum Species of Special Concern N/A Floating Marsh Marigold Caltha natans Endangered N/A Lapland Buttercup Ranunculus lapponicus Species of Special Concern N/A Least Moonwort Botrychium simplex Species of Special Concern N/A Matricary Grapefern Botrychium matricariifolium Tracked* N/A Michigan Moonwort Botrychium michiganese Tracked* N/A Northern Comandra Geocaulon lividum Tracked* N/A Pale Moonwort Botrychium pallidum Endangered N/A Prairie Moonwort Botrychium campestre Species of Special Concern N/A Small Shinleaf Pyrola minor Species of Special Concern N/A Woolgrass Scirpus pedicellatus Tracked* N/A * Note: Species is tracked but not legally protected

135 Appendix B EPA nterim Economic Guidance Workbook

136 Worksheet A Pollution Control Project Summary nformation Cliffs Erie, LLC Current Capacity of the Pollution Control System 0.0 MGD There is not currently a pollution control system installed at SD033. This variance is necessary to provide the time required to investigate, test and implement a technically and economically feasible method for permanent mitigation of the parameters of concern. Design Capacity of the Pollution Control System Current Excess Capacity Expected Excess Capacity after Completion of Project Projected Groundbreaking Date Projected Date of Completion (see previous) (see previous) 0.0 MGD 0.0% TBD TBD TBD Please describe the pollution control project being proposed below. As described in this Variance Application for SD033, CE has been actively pursuing alternatives to meet the water quality standards, including completion of several studies focused on the identification and evaluation of viable mitigation and/or treatment technologies and has developed a process to identify the most appropriate alternative. However, additional time is required to test, evaluate and implement a viable solution. Therefore, the type of pollution control system that will be implemented at SD033 is yet to be determined. (Please refer to Section Technological Feasibility of the Variance Application for further details) Please describe the other pollution control options considered, explaining why each options was rejected. Please refer to Section Technological Feasibility and Appendix C of the Variance Application for further details related to the pollution control options both currently under consideration and that have been eliminated from consideration.

137 Worksheet G Calculation of Total Annualized Project Costs Cliffs Erie, LLC Capital costs to be financed ($) 3 nterest rate for financing (%) Time period of financing (Assume 10 years 1 ) $9,700,000 (1) 3.5% (i) 10 (n) Annualization factor = i/([(1 + i) n - 1] + i) (2) Annualized capital cost [(1) (2)] $1,166,341 (3) Annual cost of operation and maintenance (including but not limited to monitoring, inspection, permitting fees, waste disposal charges, $1,000,000 (4) repair, administration and replacement) ($) 2,3 Total annual cost of pollution control project [(3) + (4)] $2,166,000 (5) Notes: 1 While actual payback schedules may differ across projects and companies, assume equal annual payments over a 10-year period for consistency in comparing projects. 2 For recurring costs that occur less frequently than once a year, pro rate the cost over the relevant number of years (e.g., for pumps replaced once every three years, include one-third of the cost each year). 3 These costs assume treatment by membrane treatment (nanofiltration) as a representative of the cost of potential pollution control systems. Please note that this does not indicate that membrane treatment (nanofiltration) is a viable, effective, or appropriate treatment technology for SD033; additional time is required to test, evaluate and implement a viable solution at SD033. Guidance Documentation Component Section Page Verify Project Costs 3.1.a 3-2 Capital Cost to be Financed 3.1.a; 3.1.b 3-2; 3-3 Annual Cost of Operation and Maintenance 3.1.b 3-3 nterest Rate for Financing 3.1.b 3-3 Time Period for Financing 3.1.b 3-3

138 Data Needed to Calculate the Primary and Secondary ndicators (for Worksheets H,, J, K, & L) Cliffs Erie, LLC Applicant Name Three most recently completed fiscal years (most recent first): 2011 Cliffs Erie, LLC Revenues ($) $0 $0 $0 Cost of Goods Sold (including the cost of materials, direct labor, indirect labor, rent and heat) ($) $0 $0 $0 Portion of Corporate Overhead Assigned to the Discharger (selling, general, administrative, interest, R&D expenses, and depreciation on common -$14,157,808 $3,994,792 $1,490,769 property) ($) Net ncome after Taxes ($)* $14,157,808 -$3,994,792 -$1,490,769 Depreciation ($) $0 $0 $0 Current Assets (the sum of inventories, prepaid expenses, and accounts receivable) ($) $25,272,774 $3,983,776 $3,647,055 Current Liabilities (the sum of accounts payable, accrued expenses, taxes, and the current portion of long-term debt) ($) $1,139,288 $3,660,827 $1,896,962 Current Debt ($) $0 $0 $0 Long-term Debt ($) $0 $0 $0 Long-term Liabilities (long-term debt such as bonds, debentures, and bank debt, and all other noncurrent liabilities such as deferred income taxes) ($)* $15,724,177 $14,986,879 $13,444,532 Owner Equity (the difference between total assets and total liabilities, including contributed or paid in capital and retained earnings) ($)* $12,157,638 $8,080,317 $16,287,671 Note: * 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in Guidance Documentation Component Section Page Financial mpact Analysis (overview) Current Assets 3.2b 3-7 Current Liabilities 3.2b 3-8

139 Worksheet H Calculation of Earnings Before Taxes With and Without Pollution Control Project Costs Cliffs Erie, LLC A. Earnings Without Pollution Control Project Costs EBT = R - CGS - CO Where: EBT = R = CGS = CO = Earnings Before Taxes Revenues Cost of Goods Sold (including the cost of materials, direct labor, indirect labor, rent and heat) Portion of Corporate Overhead Assigned to the Discharger (selling, general, administrative, interest, R&D expenses, and depreciation of common property) Three Most Recently Completed Fiscal Years R $0 $0 $0 (1) CGS $0 $0 $0 (2) CO -$14,157,808 $3,994,792 $1,490,769 (3) EBT [(1) - (2) - (3)] $14,157,808 -$3,994,792 -$1,490,769 (4) Considerations: Have Earnings Before Taxes changed over the three year period? f so, what would a "typical" year's EBT be? Explain below was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in This income stream was approximately $3.0 million annual in 2010 and $1.5 million annual in 2009, and was related to the asset sales that were concluded in With the financial impact of these asset sales removed, Earnings Before Taxes (EBT) for each of the years would be approximately: 2011: -$2.3 million (loss), 2010: -$7.0 million (loss), 2009: -$3.0 million (loss).

140 (Worksheet H cont.) B. Earnings with Pollution Control Project Costs EWPR = EBT - ACPR Where: EWPR = EBT = ACPR = Earnings with Pollution Control Project Costs Earnings Before Taxes (4) Total Annual Costs of Pollution Control Project [Worksheet G, (5)] EBT (4) ACPR [Worksheet G, (5)] EWPR [(5) - (6)] The Most Recently Completed Fiscal Year 2011 $14,157,808 (5) $2,166,000 (6) $11,991,808 (7) Considerations: Will earnings be positive after paying the annual cost of pollution control? No Additional comments: Earnings will not be positive when comments in (A) above are considered. Guidance Documentation Component Section Page Profitability 3.2.a 3-6

141 Worksheet Calculation of Profit Rates With and Without Pollution Control Project Costs Cliffs Erie, LLC A. Profit Rate Without Project Costs Where: PRT = EBT = R = PRT = EBT R Profit Rate Before Taxes Earnings Before Taxes Revenues Three Most Recently Completed Fiscal Years EBT [Worksheet H, (4)] $14,157,808 -$3,994,792 -$1,490,769 (1) R [Worksheet H, (1)] $0 $0 $0 (2) PRT [(1) / (2)] (3) Considerations: How have profit rates changed over the three years? Cliffs Erie LLC is a non-operating mining entity. The only significant income stream for Cliffs Erie LLC in the past has come from the sale of its assets. Once the assets of value have all been sold, much of which has already happened by 2011, Cliffs Erie will stop generating any income at all. Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the most recent year typical of the three years? No, use t is more representative of a 'typical' year. How do these profit rates compare with the profit rates for this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity.

142 (Worksheet cont.) B. Profit Rate With Pollution Control Costs Where: PRPR = EWPR = R = The Most Recently Completed Fiscal Year 2011 EWPR [Worksheet H, (7)] $11,991,808 (4) R [Worksheet H, (1)] $0 (5) PRPR [(4) / (5)] 0.00 (6) PRPR = EWPR R Profit Rate with Pollution Control Costs Before-Tax Earnings With Pollution Control Costs Revenues Considerations: What would be the percentage change in the profit rate for the most recent year due to pollution control costs? [(PRPR - 0% How does the Profit Rate with Pollution Control Costs compare to the profit rate of this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity. s there ability to raise prices to cover some or all of the pollution control costs? Explain below: Not applicable. Cliffs Erie LLC is a non-operating entity. Component Revenues Profitability (overview) Comparison to Similar Line of Business nterpretation of Profit Test Earnings Before Taxes Effect of Pollution Control on Profit Potential to Raise Prices Guidance Documentation Section 3.1b 3.2.a 3.2.a 3.2.a 3.2.a 3.2.a 3.2.a Page

143 Worksheet J Calculation of the Current Ratio Cliffs Erie, LLC Where: CR = CA = CL = CR = CA CL Current Ratio Current Assets (the sum of inventories, prepaid expenses, and accounts receivable) Current Liabilities (the sum of accounts payable, accrued expenses, taxes, and the current portion of long-term debts) Three Most Recently Completed Fiscal Years CA $25,272,774 $3,983,776 $3,647,055 (1) CL $1,139,288 $3,660,827 $1,896,962 (2) CR [(1) / (2)] (3) Considerations: s the most recent year typical of No, use t is more representative of a 'typical' the three years? year's ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the current ratio (3) greater than 2.0? No How does the current ratio (3) compare with the current ratios for other firms in this line of business? Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Liquidity (overview) Current Ratio Current Assets Current Liabilities nterpretation of Current Ratio Comparison to Similar Lines of Business Section 3.2.b 3.2.b 3.2b 3.2b 3.2.b 3.2.b Page

144 Worksheet K Calculation of Beaver's Ratio Cliffs Erie, LLC Where: BR = CF = TD = BR = CF TD Beaver's Ratio Cash Flow Total Debt Three Most Recently Completed Fiscal Years Net income after taxes $14,157,808 -$3,994,792 -$1,490,769 (1) Depreciation $0 $0 $0 (2) CF [(1) + (2)] $14,157,808 -$3,994,792 -$1,490,769 (3) Current debt $0 $0 $0 (4) Long-term debt $0 $0 $0 (5) TD [(4) + (5)] $0 $0 $0 (6) BR [(3) / (6)] (7) Considerations: s the most recent year typical of the No, use t is more representative of a three years? 'typical' year's ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in s the Beaver's Ratio greater than 0.2? s the Beaver's Ratio less than 0.15? s the Beaver's Ratio between 0.2 and 0.15? No Yes No How does this ratio compare with the Beaver's Ratio for other firms in the same business? Not applicable. Cliffs Erie LLC is a non-operating entity. Component Solvency (overview) Beaver's Ratio nterpretation of Beaver's Ratio Comparison to Similar Lines of Business Guidance Documentation Section Page 3.2.b b b b 3-10

145 Worksheet L Debt to Equity Ratio Cliffs Erie, LLC Where: DER = LTL = OE = DER = LTL OE Debt/Equity Ratio Long-Term Liabilities (long-term debt such as bonds, debentures, and bank debt, and all other noncurrent liabilities such as deferred income taxes) Owner Equity (the difference between total assets and total liabilities, Three Most Recently Completed Fiscal Years LTL $15,724,177 $14,986,879 $13,444,532 (1) OE $12,157,638 $8,080,317 $16,287,671 (2) DER [(1) / (2)] (3) Considerations: s the most recent year typical of No, use t is more representative of a 'typical' year's the three years? ratio.* *Please Note: 2011 was an atypical year results include the final financial settlements of significant asset sales, which was a one time ballon payment are more representative of a typical year; however, they also include an income stream that no longer exists following the final financial settlements of the asset sales in How does the debt to equity ratio (3) compare with the ratio for firms in the same business? Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Leverage (overview) Debt/Equity Ratio Owner Equity nterpretation of Debt/Equity Ratio Comparison to Similar Dischargers mpact of Special Sources of Funding Section 3.2b 3.2b 3.2b 3.2.b 3.2.b 3.2.b Page

146 Financial Analysis Summary Cliffs Erie, LLC Entity Annual Pollution Control Costs Most Recently Completed Fiscal Year Profit Rate Without Pollution Controls Profit Rate With Pollution Controls Percent Change in Profit Rate Due to Pollution Controls Cliffs Erie, LLC $2,166, % Note: 1. Based on the most recently completed fiscal year (2011) Cliffs Erie, LLC Typical Value for Facilities/Firms in Similar Lines of Business Note: 2. Based on a typical fiscal year (2010) Primary Measure: Profit Test 1 Comparison with Typical Values for Facilities/Firms in Similar Line of Business 2 Entity Primary Measure: Profit Test (Profitability) Current Ratio (Liquidity) Secondary Measures Beaver's Ratio (Solvency) Debt/Equity Ratio (Leverage) Summarize and discuss financial circumstances with and without pollution controls, and compare primary and secondary measures with the corresponding typical values for facilities/firms in similar lines of business. Not applicable. Cliffs Erie LLC is a non-operating entity. Guidance Documentation Component Financial mpact Analysis (overview) Primary Measure (profitability) Secondary Measures nterpreting the Results Measuring Substantial mpacts (flowchart) Section Page a b Figure

147 Worksheet N Factors to Consider in Making a Determination of Widespread Social and Economic mpacts Cliffs Erie, LLC Define the affected community in this case; what areas are included Cliff Erie's Hoyt Lakes Mine Area is located north of the City of Hoyt Lakes in Sections 1, 2, 11-16, and of Township 59 North, Range 14W, Saint Louis County, Minnesota. Employees, contractors and suppliers live in the nearby community as well as other communities on the ron Range, including Aurora, Biwabik, Gilbert, McKinley, Eveleth, and Virginia, and in unincorporated areas of St. Louis County. (1) Current unemployment rate in affected community ([Current # of persons collecting unemployment in affected community / labor force in affected community], or, if unavailable, current unemployment rate provided in Tab 9.) (%) Current national unemployment rate (%) Additional number of persons expected to collect unemployment in affected community due to compliance with water quality standards (#) Expected unemployment rate in the affected community after compliance with water quality standards ([Current # of persons collecting unemployment in affected community + (4)] / labor force in affected community) (%) Median household income in affected community ($) Total number of households in affected community (#) Percent of population below the poverty line in affected community (%) Current expenditures on social services in affected community ($) Expected expenditures on social services due to job losses in the affected community ($) Current total tax revenues in the affected community ($) Refer to Table N-1 (2) 7.9%* (3) Less than 10 (4) (5) Refer to Table N-2 (6) Refer to Table N-3 (7) Refer to Table N-4 (8) Refer to Table N-5 (9) (10) Refer to Table N-6 (11)

148 (Worksheet N cont.) Tax revenues paid by the private entity to the affected community ($) Tax revenues paid by the private entity as a percentage of the affected community's total tax revenues (%) * Current statewide unemployment rate ([Current # of persons collecting unemployment in state] / labor force in state], or, if unavailable, current statewide unemployment rate provided in Tab 9.) (%) Additional number of persons expected to collect unemployment in the state due to compliance with water quality standards (#) Expected statewide unemployment rate, after compliance with water quality standards ([Current # of persons collecting unemployment in state + (15)]/labor force in state) Current expenditures on social services in state ($) Expected statewide expenditures on social services due to job losses ($) (12) (13) 5.8%* (14) (15) (16) $8,312,488,593** (17) (18) Other current community characteristics or anticipated impacts that are not listed in the worksheet: Notes: * Bureau of Labor Statistics seasonally adjusted value for October 2012 ( accessed December 3, 2012) ** 2005 Human Services Enrollment and Services Spending ( accessed December 3, 2012) Guidance Documentation Component Section Page Affected Community Unemployment Rates Labor Force Expenditures on Social 4.3 Services 4-4 Tax Revenues Multiplier Effect Consideration of Economic Benefits of Clean Water

149 Table N-1: Unemployment rate in affected community mpact area Unemployment Rate (%) Source Aurora Biwabik Eveleth Gilbert Hoyt Lakes McKinley Town of White Virginia St. Louis County Minnesota Total N/A 4.4 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 11.9 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 7.6 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 16.3 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 15 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) N/A 10.5 U.S. Census American Factfinder 2010 ACS 5-yr estimates ( accessed February 27, 2012) 6.5 Bureau of Labor Statistics not seasonally adjusted preliminary value for December 2011 ( accessed February 27, 2012) 5.7 Bureau of Labor Statistics seasonally adjusted value for December 2012 ( accessed February 27, 2011)

150 Table N-2: Median household income in affected community Aurora mpact area Median Household ncome (2010 nflation Adjusted Dollars) N/A Year/Source Biwabik $ 37,500 Eveleth $ 36,755 Gilbert $ 40,925 Hoyt Lakes $ 45,338 McKinley $ 27,750 Town of White N/A Virginia $ 32,664 St. Louis County $ 44,941 Minnesota Total $ 55,459 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

151 Table N-3: Number of households in affected community mpact area Number of households Year/Source Aurora Biwabik 523 Eveleth 1,779 Gilbert 861 Hoyt Lakes 912 McKinley 27 Town of White Virginia 4,028 St. Louis County 86,561 Minnesota Total 2,091,548 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

152 Table N-4: Percent of population living below poverty level in affected community Aurora mpact area Percent below poverty level (%) Year/Source Biwabik 18.7 Eveleth 18.8 Gilbert 11.0 Hoyt Lakes 4.5 McKinley 15.9 Town of White Virginia 21.2 St. Louis County 17.9 Minnesota Total 11.6 U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012) U.S. Census American Factfinder, 2010 ACS 5 yr estimates ( accessed February 27, 2012)

153 Table N-5: Expenditures on social services in affected community mpact area Social Services Expenditures Aurora $ 1,414,513 Biwabik $ 1,201,311 Eveleth $ 4,134,077 Gilbert $ 2,087,466 Hoyt Lakes $ 2,620,085 McKinley $ 55,428 Town of White Virginia $ 9,830,928 St. Louis County $ 217,734,620 Minnesota Total $ 8,312,488,593 Year/Source STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 16 "Classification of Expenditures for All Governmental Funds For the Year Ended December 31, 2009", data for current expenditures ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota County Budgets 2010 Summary Budget Data Together With 2009 Revised Summary Budget Data, 2009 revised budget data for current expenditures, ( accessed February 27, 2012) 2005 Human services enrollment and services spending( accessed February 27, 2012)

154 Table N-6: Current total tax revenues in affected community mpact area 2009 U.S. Dollars Year/Source Aurora $ 665,617 Biwabik $ 653,040 Eveleth $ 871,281 Gilbert $ 557,802 Hoyt Lakes $ 939,945 McKinley $ 2,242 Town of White N/A Virginia $ 2,499,175 St. Louis County $ 108,028,005 Minnesota Total $ 17,726,000,000 STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota City Finances 2009 Revenues, Expenditures, and Debt Table 15 "Classification of Revenues for All Governmental Funds For the Year Ended December 31, 2009" ( accessed February 27, 2012) STATE OFMNNESOTA Office of the State Auditor, Minnesota County Budgets 2010 Summary Budget Data Together With 2009 Revised Summary Budget Data, 2009 revised budget data for property taxes and all other taxes, ( accessed February 27, 2012) FY 2011 Estimate ( accessed February 27,2012)

155 Appendix C Summary: Comprehensive Review of Potential Treatment Technologies for SD033

156 Appendix C Summary: Comprehensive Review of Potential Treatment Technologies for SD033 Through the process of developing the Short-Term Mitigation Evaluation and mplementation Plan for SD033 (Short-Term Plan) and the Long-Term Mitigation Evaluation and mplementation Plan for SD033 (Long-Term Plan), CE has undertaken a comprehensive review of potential treatment technologies to achieve compliance with water quality standards for the parameters of concern at SD033. The following potential treatment technologies were screened in development of the Short-Term Mitigation Evaluation and mplementation Plan for SD033: Biological Treatment: constructed wetlands, floating wetlands, natural wetlands, biofilters, in-pit biological treatment, and anaerobic reactors Chemical Precipitation: barium precipitation, ettringite precipitation (SAVMN and CESR), gypsum precipitation, and lime softening on Exchange: Sulf-X and Sulf-XC Membrane Treatment: microfiltration, ultrafiltration, nanofiltration, reverse osmosis, and electrodialysis reversal The following potential treatment technologies were screened in development of the Long-Term Mitigation Evaluation and mplementation Plan for SD033: Floating Wetland Treatment Permeable Reactive Barrier (PRB) on Exchange (Sulf-X or Sulf-XC) Reverse Osmosis Nanofiltration Source solation Natural Attenuation Enhanced Natural Attenuation through Nutrient Addition in the Pits Conventional Lime Softening Passive Softening Aquatic System and Surface Flow Wetlands Based on the results of these screenings, the following potential treatment technologies were evaluated further based on effectiveness, implementability, long-term performance, and cost:

157 Floating Wetland o Summary of review: After review of potential biological treatment alternatives during development of the Short-Term Plan, a floating wetland system was selected for further evaluation, as described in Section of the Short-Term Plan. Section 5.2 of the Short-Term Plan includes a description of the floating wetland system, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, the floating wetland system was selected for further evaluation, as described in Sections and 5.5 of the Long-Term Plan. Section 6.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of a floating wetland system. Section 7.0 of the Long-Term Plan recommended further evaluation a floating wetland system through preimplementation study efforts and pilot-scale testing. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD033: Section 5.1.1: Biological Treatment Section 5.2: Floating Wetlands Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.1.1: Floating Wetland Treatment Section 5.5: Floating Wetland Treatment Section 6.0: Comparison of Mitigation Alternatives Section 7.0: Recommended Protocol Section 7.1.2: Floating Wetland Treatment Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Lime Softening o Summary of review: After review of potential chemical precipitation treatment alternatives during development of the Short-Term Plan, no chemical precipitation alternative was deemed suitable for independent consideration due to potential limitations, as described in Section of the Short-Term Plan. However, lime softening was selected for further consideration and potential evaluation with other treatment technologies as either a pre- or post-treatment option. Further details

158 related to the potential applications and limitations of lime softening are included in Sections and of the Long-Term Plan. Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD033: Section 5.1.2: Chemical Precipitation Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.2.4: Conventional Softening Section 4.2.5: Passive Softening Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 on Exchange (Sulf-X) o Summary of review: After review of potential ion exchange treatment alternatives during development of the Short-Term Plan, BioteQ Environmental Technologies, nc. s proprietary Sulf-X ion exchange process was selected for further evaluation, as described in Section of the Short-Term Plan. Section 5.3 of the Short-Term Plan includes a description of the Sulf-X ion exchange process, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, the Sulf-X ion exchange system was not selected for further evaluation due primarily to concerns related to implementability, as described in Section of the Long- Term Plan. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD033: Section 5.1.3: on Exchange Section 5.3: on Exchange Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.1.3: on-exchange Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Membrane Treatment (Reverse Osmosis or Nanofiltration)

159 o Summary of review: After review of potential membrane treatment alternatives during development of the Short-Term Plan, reverse osmosis was selected for further evaluation, as described in Section of the Short-Term Plan. Section 5.4 of the Short-Term Plan includes a description of reverse osmosis, related implementation considerations, a preliminary cost estimate, and a hypothesis of the expected outcome of further evaluation. During development of the Long-Term Plan, membrane treatment by reverse osmosis or nanofiltration was not selected for further evaluation due primarily to concerns related to implementability, as described in Section of the Long-Term Plan. However, in the MPCA s July 25, 2012 letter to CE, RE: April 6, 2010, Cliffs Erie, LLC Consent Decree, Review of Long Term Plans SD033 and SD026, the MPCA indicated that, further evaluation of an active treatment technology, such as membrane treatment, would be required; therefore a Work Plan for nvestigation of Membrane Treatment at SD033 was submitted to the MPCA in September The work plan includes a proposed schedule and protocol for conducting a pilot-scale test including evaluation of reverse osmosis technology and evaluation of associated concentrate (brine) management approaches and the use of concentrate volume reduction technologies. o Further details related to this review: Short-Term Mitigation Evaluation and mplementation Plan for SD033: Section 5.1.4: Reverse Osmosis Section 5.4: Reverse Osmosis Table 2: Treatment Screening Matrix Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.1.4: Reverse Osmosis and Nanofiltration Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Work Plan for nvestigation of Membrane Treatment at SD033: Section 1.2: Selection of Reverse Osmosis as Active Treatment Technology and Testing Approach Source solation o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, source isolation (such as covering of stockpiles in Area 5 North to isolate stockpiled rock)

160 was identified for further evaluation, as described in Sections and 5.1 of the Long-Term Plan. Section 6.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of source isolation. Section 7.0 of the Long-Term Plan recommended further evaluation of source isolation through pre-implementation study efforts and pilot-scale testing. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.2.1: Source solation Section 5.1: Source solation Section 6.0: Comparison of Mitigation Alternatives Section 7.0: Recommended Protocol Section 7.1.1: Source solation Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Natural Attenuation o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, it was determined that natural attenuation would not be sufficient to address sulfate loads and thus that only enhanced natural attenuation would be evaluated further, as described in Sections and 5.2 of the Long-Term Plan. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.2.2: Natural Attenuation Section 5.2: Natural Attenuation Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Enhanced Natural Attenuation o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, enhanced natural attenuation through nutrient addition in pits was identified for further evaluation, most likely in combination with other treatment technologies, as described in Sections and 5.3 of the Long-Term Plan. Section 6.0 of the Long-

161 Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of enhanced natural attenuation. Section 7.0 of the Long-Term Plan recommended further evaluation of enhanced natural attenuation as a portion of an overall solution during pre-implementation study efforts. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.2.3: Enhanced Natural Attenuation through Nutrient Addition in Pits Section 5.3: Enhanced Natural Attenuation Section 6.0: Comparison of Mitigation Alternatives Section 7.0: Recommended Protocol Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Permeable Reactive Barrier (PRB) o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, a permeable reactive barrier (PRB) was identified for further evaluation, as described in Sections and 5.4 of the Long-Term Plan. Section 6.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of a PRB. Section 7.0 of the Long-Term Plan recommended further evaluation a PRB. Additionally, in CE s September 25, 2012 letter to the MPCA, RE: Consent Decree in MPCA v. Cliffs Erie, Court File No. 62CV-O-2807 Response to July 25, 2012 MPCA Letter ( Review of Long Term Plans SD033 and SD026 ), CE proposed to conduct further evaluation of a PRB. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.1.2: Permeable Reactive Barrier (PRB) Section 5.4: Permeable Reactive Barrier (PRB) Section 6.0: Comparison of Mitigation Alternatives Section 7.0: Recommended Protocol Section 7.1.3: PRB Site Evaluation

162 Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033 Surface-Flow Wetland/Lagoon o Summary of review: After review of additional potential mitigation alternatives for long-term implementation during development of the Long-Term Plan, a surface-flow wetland system was identified for further evaluation in tandem with a floating wetland or PRB, as described in Sections and 5.6 of the Long-Term Plan. Section 6.0 of the Long-Term Plan includes discussion of the effectiveness, implementability, long-term performance, and cost of a surface-flow wetland system. Section 7.0 of the Long-Term Plan recommended potential further evaluation of a surface-flow wetland system based on the results of floating wetland and source isolation studies and testing. o Further details related to this review: Long-Term Mitigation Evaluation and mplementation Plan for SD033: Section 4.2.6: Aquatic System and Surface Flow Wetlands Section 5.6: Aquatic System and Surface Flow Wetland Section 6.0: Comparison of Mitigation Alternatives Section 7.0: Recommended Protocol Table 7: Effectiveness, mplementation, and Cost nformation for Treatment/Mitigation Alternatives at SD033

163 S-45 Presented below are water quality standards that are in effect for Clean Water Act purposes. EPA is posting these standards as a convenience to users and has made a reasonable effort to assure their accuracy. Additionally, EPA has made a reasonable effort to identify parts of the standards that are not approved, disapproved, or are otherwise not in effect for Clean Water Act purposes.

164 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 1 GRAND PORTAGE RESERVATON WATER QUALTY STANDARDS

165 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 2 TABLE OF CONTENTS page NTRODUCTON PURPOSE APPLCABLTY... 5 DEFNTONS... 5 DESGNATED USES... 9 A. PUBLC WATER SUPPLY... 9 B. AQUATC LFE COLD WATER FSHERES WARM WATER FSHERES SUBSSTENCE FSHERES WETLANDS C. WLDLFE D. RECREATON PRMARY CONTACT E. CULTURAL WLD RCE AESTHETCS F. FORESTRY WATER SUPPLY G. NDUSTRAL WATER SUPPLY H. NAVGATON ANTDEGRADATON POLCY MPLEMENTATON OF ANTDEGRADATON POLCY

166 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 3 TABLE OF CONTENTS page MPLEMENTATON OF WATER QUALTY STANDARDS SAMPLNG AND ANALYSS ENVRONMENTAL DEPARTMENT, DUTES AND RESPONSBLTES GENERAL STANDARDS NUMERC CRTERA AND METHODOLOGY NATURAL WATER QUALTY ADDTVTY GENERAL RSK LEVELS AND ADDTVTY STE-SPECFC WATER QUALTY CRTERA VARANCES FROM WATER QUALTY STANDARDS STANDARDS THAT VARY WTH TOTAL HARDNESS STANDARD THAT VARES WTH ph CONVERSON FACTORS FOR TRANSFORMNG TOTAL METALS TO DSSOLVED METALS METHODOLOGY TO DEVELOP OR REVSE WATER QUALTY CRTERA 24 ENFORCEMENT AND CVL PENALTES TABLES TABLE 1. DESGNATED USES.. 12 TABLE 2. CONVERSON FACTORS.. 24 TABLE 3. NUMERC CRTERA.. 26

167 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 4 GRAND PORTAGE RESERVATON WATER QUALTY STANDARDS. NTRODUCTON. The Grand Portage Band of Chippewa is a sovereign ndian nation, federally recognized and organized under the ndian Reorganization Act of June 18, 1934, 48 Stat. 984 and 25 U.S.C. Section 476, as amended. The governing body of the Grand Portage Band of Chippewa, the Reservation Tribal Council, has the inherent authority to regulate activities and natural resources of the Reservation. The Reservation Tribal Council does hereby enact the following water quality standards which apply to all waters upon, under, flowing through or bordering upon the Grand Portage Reservation including the shoreline waters of Lake Superior within the Grand Portage Zone. The Grand Portage Zone is described as follows: That part of Lake Superior begining at the intersection of the west line of Range 5 East and the shoreline of Lake Superior, thence to a point in Lake Superior one half mile south as measured along the southerly extension of the west line of Range 5 East, thence northeasterly to a point on the Minnesota-Michigan boundary line at latitude 47 degrees, 58 minutes, 40 seconds, thence northerly along the Minnesota-Michigan boundary line to a point which forms the common boundary between Minnesota, Michigan and the Province of Ontario, Canada, and thence westerly along the nternational Boundary line to the confluence of the Pigeon River.. PURPOSE. The purposes of the Grand Portage Reservation water quality standards are: 1. To designate uses for which the waters of the Grand Portage Reservation will be protected; 2. To prescribe water quality criteria imposed in order to attain and sustain the designated uses; 3. To prevent degradation of existing water quality; 4. To promote and protect the health and welfare, the political integrity, and the economic well-being of the Grand Portage Reservation, its members and all residents of the Reservation, and; 5. To protect and enhance the propagation of fish and other aquatic life, wildlife, and recreation in and on the water.

168 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 5. APPLCABLTY. 1. These standards apply to all waters of the Grand Portage Reservation. Waters of the Grand Portage Reservation are defined as all waters, including wetlands, upon, under, flowing through or bordering upon the Grand Portage Reservation. n addition, these water quality standards shall provide the basis for all water management decisions affecting water quality within the Reservation boundaries, including, but not limited to point-source permitting, non-point source controls and the physical alterations of water bodies including wetlands. 2. t is the intent of the Band that, where feasible, water quality criteria necessary to protect designated uses must be met at all times and at all locations in all waters of the Grand Portage Reservation. 3. Water quality standards will be the basis for managing discharges attributable to point and non-point sources of pollution. Water quality standards are not used to control, and are not invalidated by, natural background phenomena or acts of God. 4. The Grand Portage Reservation water quality standards may be revised from time to time, as the need arises, or as the result of updated scientific information, at a minimum will be reviewed every three years. V. DEFNTONS. Acute: Stimulus severe enough to rapidly induce an effect; in aquatic tests, an effect observed in 96 hours or less typically is considered acute. When referring to aquatic toxicology or human health, an acute effect is not always measured in terms of lethality. Acute Toxicity: Acute toxicity can be any adverse effect, which is defined as debilitating, harmful or toxic to the normal functions of the organism. Acute exposure occurs within any short observation period which begins when the exposure begins and may extend beyond the exposure period, and usually does not constitute a substantial portion of the life span of an organism. Ambient: Completely surrounding; encompassing; circulating. Antidegradation Policy: A policy that ensures that water quality is protected in order to maintain existing uses, high quality waters, and outstanding national resource waters. Background Levels: The biological, chemical, and physical conditions of a water body, upstream from the point or non-point source discharge under consideration.

169 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 6 Best Management Practices: Methods that have been determined to be the most effective, practical means of preventing or reducing pollution from non-point sources. Bioaccumulation Factor (BAF): The ratio (in L/Kg) of a substance s concentration in tissue of an aquatic organism to its concentration in the ambient water, in situations where both the organism and its food are exposed and the ratio does not change substantially over time. Biological ntegrity: The presence of a biological community that at a site that is indistinguishable in either structure or function from the biological community that would be expected absent anthropogenic impacts as determined based on a defined reference condition appropriate to the ecoregion in which the water body is located. Carcinogenic: A substance which causes an increased incidence of benign or malignant neoplasms, or substantially decreases the time to develop neoplasms, in animals or humans. Criterion Continuous Concentration (CCC): The highest water concentration of a toxicant to which organisms can be exposed indefinitely without causing chronic toxicity. Chronic Toxicity: Concurrent and delayed adverse effects that occur as a result of chronic exposure. Clean Water Act: The Federal Pollution Control Act (Public Law ), as amended (33 U.S.C et seq.). Designated Uses: Those uses set forth in these water quality standards for each water body or segment whether or not they are being attained. Examples of designated uses can include coldwater fisheries and public water supply. Dissolved Oxygen: The amount of oxygen dissolved in water or the amount of oxygen available for biochemical activity in water, commonly expressed as a concentration in milligrams per liter. Escherichia coli (E. Coli): A specific bacterial species occurring as part of the normal intestinal flora in vertebrates. Also known as Colon bacillus. Effluent: Wastewater, treated or untreated that flows out of a treatment plant, sewer, or industrial outfall. Epilimnion: The layer of water that overlies the thermocline of a lake and that is subject to the action of wind. Existing Uses: Uses actually attained in the water body on or after November 28, 1975, whether or not they are included in the water quality standards.

170 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 7 Grand Portage Zone: The area in the Minnesota waters of Lake Superior bounded by a line as follows: beginning at the mouth of the Reservation River, thence due south to the Minnesota boundary in Lake Superior, thence northeastward along such Minnesota boundary to the Canadian boundary in Lake Superior, thence westward along such Canadian boundary to the shore of lake Superior, thence southwestward along the shore of Lake Superior to the point of beginning (See Cooperative Agreement Between the Grand Portage Band of Chippewa and the Minnesota Pollution Control Agency (July 1996)). High Quality Waters: Surface waters of the Reservation in which, on a parameter by parameter basis, the quality of water exceeds levels necessary to support the propagation of fish, shellfish, wildlife and recreation in and on the water. Human Health Criteria: Criteria adopted by the Tribe for the purpose of protecting human beings from adverse health effects due to consumption of contaminated water and fish. ndigenous: Originating in, and characterizing a particular region or country; native; innate; inherent. Milligrams per Liter (mg/l): The concentration at which one milligram is contained in a volume of one liter; one milligram per liter is equivalent to one part per million (ppm) at unit density. Narrative Criterion: Narrative statements representing a quality of water that supports a particular use. When criteria are met water quality will generally protect the designated use. New or ncreased Discharge: Any building, structure, facility, or installation from which there is or may be a a discharge of pollutants, as defined in the Code of Federal Regulations, title 40, section 122.2, to surface waters of the Reservation, the construction of which commenced after July 16, Non-point Source: A source of pollution that is not a discernible, confined and discrete conveyance; a diffuse source that flows across natural or manmade surfaces, such as run-off from agricultural, construction, mining or silvicultural activities or from urban areas. NTU: Nephelometric Turbidity Units; a measure of turbidity in water. Nutrient: A chemical taken in by organisms and used in organic synthesis. Outstanding Tribal Resource Waters - Prohibited (OTRW-P): Those waters of the highest quality that are protected for uniqueness or ecological sensitivity. Waters may be classified as OTRW-Protected because of exceptional cultural, aesthetic, recreational or ecological significance, as determined by the Reservation Tribal Council. The antidegradation section of

171 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 8 the standards also states that no pollutants may be discharged from point sources to a reservation water body assigned this provision. Outstanding Tribal Resource Waters - Restricted (OTRW-R): All waters of the Reservation, except those portions designated as OTRW-Prohibited. ph: The negative logarithm of the effective hydrogen ion concentration in gram equivalents per liter; a measure of the acidity or alkalinity of a solution, increasing with increasing alkalinity and decreasing with increasing acidity. Point Source: Any discernible, confined and discrete conveyance from which pollutants are or may be discharged into a water body. Primary Contact Recreational: Activities where a person would have direct contact with the water to the point of complete submergence, including but not limited to skin diving, swimming, and water skiing. Public Water Supply: A stream, river, lake or impoundment specifically classified by the Reservation Tribal Council as suitable to provide an adequate supply of drinking water for the continuation of the health and well-being of the residents of the Grand Portage Reservation. Reservation Tribal Council (RTC): The governing body of the Grand Portage Band of Chippewa. Secondary Contact Recreational: The recreational use of a stream, river, lake or impoundment in which contact with the water may, but need not, occur and in which the probability of ingesting water is minimal; examples are fishing and boating. Toxicity: State or degree of being toxic or poisonous; lethal or sub lethal adverse effects on organisms, due to exposure to toxic materials. Tribe: The Grand Portage Band of Chippewa. Turbidity: (1) A measure of the amount of suspended material, particles, or sediments that cause light traveling through a water column to scatter. (2) The clarity of the water expressed as nephelometric turbidity units (NTU) and measured with a calibrated turbidimeter. Waters of the Reservation: Any accumulation of water, surface or underground, natural or artificial, public or private, or parts thereof which are wholly or partially within, flow through, or border upon the Grand Portage Reservation; including but not limited to lakes, streams and wetlands. Wetland: Those areas that have a predominance of hydric soils, are inundated or saturated by

172 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 9 surface or ground water at a frequency and duration to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soils. Normal circumstances refers to the soil and hydrologic conditions normally present, without regard to whether the vegetation has been removed or whether the lands have been otherwise modified/manipulated by human activity. Wild Rice Areas: A stream, river, lake, or impoundment, or portion thereof, presently has or historically had the potential to sustain the growth of wild rice (also known as Zizania palustris or manoomin). V. DESGNATED USES. Waters of the Reservation are assigned designated uses to serve the purposes of the Clean Water Act, as defined at sections 101(a)(2) and 303(c) which means that water quality standards should provide, wherever attainable, water quality for the protection of fish, shellfish, and wildlife, recreation in and on the water, as well as considering the use and value of waters for public water supplies, industrial purposes and navigation. Certain existing uses are considered to be covered by several additional special designated uses for tribal cultural activities. Designated uses are assigned to individual water bodies in order to protect water quality appropriate for each use. Some waters of the Reservation may have natural ambient water quality containing concentrations of parameters that exceed water quality criteria necessary for the protection of a designated use. Natural ambient water quality is defined as the quality in absence of human caused additions of a substance; and shall be determined by water quality monitoring. Designated uses will not be used to control, and are not invalidated by, natural ambient water quality. A. PUBLC WATER SUPPLY - a stream, river, lake or impoundment specifically classified by the Grand Portage Reservation Tribal Council as suitable to provide an adequate supply of drinking water for the continuation of the health and well-being of the residents of the Grand Portage Reservation. These are waters that with conventional treatment will be suitable for human intake and meet federal regulations for drinking water. B. AQUATC LFE 1. Cold Water Fisheries - a stream, river, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and propagation of cold water fish and other aquatic life, or serve as a spawning or nursery area for cold water fish species. Examples of coldwater fish include brook trout, rainbow trout, and lake trout. 2. Warm Water Fisheries - a stream, river, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and

173 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 10 propagation of warm water fish and other aquatic life, or serving as a spawning or nursery area for warm water fish species. Examples of warm water fish species include large mouth bass and walleyed pike. 3. Subsistence Fishing (Netting Area) - that portion of Lake Superior referred to as the Grand Portage Zone, including Grand Portage Bay, necessary to provide a sufficient diet of fish in order to sustain a healthy, on-reservation population. 4. Wetland - an area that will be protected and maintained for some of the following uses: maintaining biological diversity, preserving wildlife habitat, providing recreational activities, erosion control, groundwater recharge, low flow augmentation, storm water retention, and prevention of stream sedimentation. C. WLDLFE. - All surface waters capable of providing a water supply and vegetative habitat for the support and propagation of all wildlife located within the Grand Portage area. D. RECREATON Primary Contact Recreational - the recreational use of a stream, river, lake or impoundment involving prolonged contact and the possibility of ingesting water in quantities sufficient to pose a health hazard; examples are swimming and water skiing. E. CULTURAL 1. Lake Superior Coastal Waters - high intensity use: Great Lakes coastal waters public beaches where the majority of people swim due to the close proximity to the village, exceptionally clear water, and cobble or sand substrates. 2. nland waters moderate intensity use: nland rivers or lakes with moderate swimming use due to remote location, dense aquatic vegetation, and waters that are mildly stained. 3. nland waters infrequent use: 1) Remote intermittent streams and streams surrounded by sedge meadows; and 2) inland bogs, wetlands and shallow lakes surrounded by floating sedge and peat mats where swimming is not an existing use due to highly stained waters and deep mucky substrates that create dangerous conditions for swimming. 1. Wild Rice Areas - a stream, river, lake, wetland or impoundment, or portion thereof, presently, historically or with the potential to be vegetated with wild rice.

174 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page Aesthetics - a stream, river, lake, wetland or impoundment, with an uncharacteristic beauty or which represents the traditional value system of the Grand Portage Band of Chippewa, as determined by the Grand Portage Reservation Water Resources Board. F. FORESTRY WATER SUPPLY - all waters of the Reservation shall be of sufficient quality for use in forestry applications. G. NDUSTRAL WATER SUPPLY - all waters of the Reservation shall be of sufficient quality to be used as a water supply for commercial processes. H. NAVGATON - all waters of the Reservation shall be of sufficient quality for use in navigation.

175 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 12 Table 1. Designated Uses NAME TOWNSHP RANGE SECTON DESGNATED USES LAKES: CENTER LAKE T 63 N R 5 E 11 B1, B4, C, D3, E1, F, G, H CHEVANS LAKE T 64 N R 5 E 35 B2, B4, C, D3, F, G, H CUFFS LAKE T 63 N R 5 E 12 & 13 B2, B4, C, D3, E1, F, G, H DUTCHMAN LAKE T 63 N R 6 E 6 & 7 B2, B4, C, D3, F, G, H HELMER/ NELSON POND T 63 N R 5 E 13 B2, B4, C, D3, E1, F, G, H LTTLE LAKE T 63 N R 6 E 3 B1, B4, C, D3, F, G, H LOON LAKE T 63 N R 5 E 4 B2, B4, C, D3, E1, F, G, H MOUNT MAUD LAKE T 63 N R 5 E 1 B2, B4, C, D3, E1, F, G, H NORTH LAKE T 63 N R 5 E 8 & 9 B2, B4, C, D3, E1, F, G, H SPECKLED TROUT LAKE T 63 N R 5 E 7 & 8 B1, B2, C, D2, F, G, H SWAMP LAKE T 63 N R 4 E R 5 E 1 & 12 6 & 7 B1, B4, C, D2, E1, F, G, H SWEDE LAKE T 64 N R 5 E 16 & 17 B2, B4, C, D3, F, G, H TAYLOR LAKE T 63 N R 5 E 16 & 17 B1, B4, C, D2, D2, F, G, H TEAL LAKE T 64 N R 6 E 27 & 34 B2, B4, C, D3, D2, E1, F, G, H TURTLE LAKE T 63 N R 5 E 16 B2, B4, C, D2, F, G, H UNNAMED LAKE T 63 N R 5 E 16 B2, B4, C, D3, F, G, H CREEKS: GRAND PORTAGE CREEK T 63 N T 64 N R 6 E R 6 E 4, 5, 6 31, 32, 33 B1, C, D1, D2, F, G, H HOLLOW ROCK CREEK T 63 N R 5 E 9, 10, 14, 15, 16, 23, 24, 25 RED ROCK CREEK T 63 N R 5 E 21, 22, 26, 27, 28, 35 B1, C, D1, D2, F, G, H B1, C, D1, D2, F, G, H

176 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 13 NAME TOWNSHP RANGE SECTON DESGNATED USES RVERS: PGEON RVER T 64 N R 4 E R 5 E R 6 E R 7 E 25 &36 13, 14, 20, 21, 22, 29, 30, 31 18, 19, 20, 21, 22, 23, 24, 26, 27 19, 30 B1, B2, C, D2, E1, F, G, H RESERVATON RVER T 62 N T 63 N R 5 E R 5 E 6 7, 18, 19, 30, 31 B1, C, D2, F, G, H LAKE SUPEROR BAYS: CANNONBALL BAY T 62 N T 63 N R 5 E 4, 5, 6 33, 34, 35 B1, B3, C, D1, F, G, H CLARK S BAY T 64 N R 7 E 28, 33, 34 B1, B3, C, D1, F, G, H DERONDA BAY T 63 N R 5 E R 6 E 25 16, 17, 19 B1, B3, C, D1, F, G, H GRAND PORTAGE BAY T 63 N R 6 E 3, 4, 9, 10, 11, 16 B1, B3, C, D1, F, G, H LTTLE PORTAGE BAY T 64 N R 7 E 26 B1, B3, C, D1, F, G, H MORRSON BAY T 64 N R 7 E 32 & 33 B1, B3, C, D1, F, G, H PGEON BAY T 64 N R 7 E 25, 26, 27, 28 B1, C, D1, F, G, H WAUSWAUGONNG BAY T 63 N, T 64 N OTHER: WETLANDS R 6 E 2, 11, 25, 30, 31, 35, 36 A, B1, C, D1, E2, F, G, H B4, C, D3, F, G, H

177 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 14 V. ANTDEGRADATON POLCY. ntroduction: The Tribe s existence has been dependent on the ability of the land and waters to provide natural resources for consumption, subsistence, cultural preservation, religious practice and sustainable economic development. Areas within the Reservation serve as a refuge for Tribal members to continue to practice a life that exemplifies sustainable economic development, and that preserves the resources critical to cultural integrity and survival of the Tribe. The following Antidegradation policy will be applied to waters of the Reservation in order to maintain adequate water quality to support these functions. Protection of Existing Uses: Existing in-stream uses, as defined pursuant to 40 CFR 131, and the level of water quality necessary to protect existing uses shall be maintained and protected. No further water quality degradation that would interfere with or become injurious to existing uses is allowable. Protection of High Quality Waters: This antidegradation policy provides for the maintenance and protection of high quality waters through the classification of all waters within the exterior boundaries of the Grand Portage Reservation as Outstanding Tribal Water Resources (OTWR). Two subcategories of OTWR exist as follows: (a) OTWR-Restricted (lowered water quality may be allowed under limited circumstances) (b) OTWR-Prohibited (Discharges and permanent lowering of water quality are prohibited) Each of the two subcategories of Grand Portage High Quality Waters has specific implementation procedures as outlined below in Section V. V. MPLEMENTATON OF ANTDEGRADATON POLCY. Cooperative Agreement with Minnesota: The classifications referred to above are intended to comply with terms of a cooperative agreement between the Grand Portage Band and the Minnesota Pollution Control Agency (MPCA), and approved by EPA, dated July 16, Under this agreement, the Band and MPCA will work cooperatively to plan and administer independently adopted water quality standards and certification programs under the Clean Water Act. A copy of the Agreement can be found in Attachment #1. Protection of Designated and Existing Uses: For all waters, the Reservation Water Resources Board will ensure that the level of water quality necessary to protect existing uses is maintained. n order to achieve this requirement, and consistent with 40 CFR , these water quality standards contain use designations which include all existing

178 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 15 uses. Controls will be established as necessary for point and non-point sources of pollutants to ensure the water quality criteria applicable to the designated uses are achieved and that any designated use of downstream water is protected. Where water quality does not support the designated use of a water body or ambient pollutant concentrations exceed water quality criteria and values applicable to the water body, the Reservation Water Resources Board must not allow a lowering of water quality for the pollutant or pollutants preventing attainment of such uses. Thermal discharges: n those cases where the potential lowering of water quality is associated with thermal discharge, the decision to allow such degradation shall be consistent with section 316 of the Clean Water Act (CWA). Protection of endangered or threatened species: No lowering of water quality will be allowed that would threaten the continued existence of Federally-listed threatened or endangered species or listed critical habitat. Outstanding Tribal Water Resources -Restricted: n Reservation waters classified as restricted discharge areas, or OTWR-Restricted, actions resulting in a lowering of water quality cannot occur unless an antidegradation demonstration has been completed pursuant to the requirements listed below. Antidegradation Demonstration: Any person or entity proposing a new or increased discharge of any pollutant to a water body classified as an Outstanding Tribal Resource Water-Restricted must first provide the Grand Portage Water Resources Board (GPWRB) the following information in support of the proposed new or increased discharge for consideration: 1. dentify any cost effective pollution prevention alternatives and techniques that are available that would eliminate or substantially reduce the extent to which the new or increased loading will result in lowering of water quality; 2. dentify alternative or enhanced treatment techniques that are available that would eliminate the lowering of water quality and their costs relative to the cost of treatment necessary to achieve applicable effluent limitations; 3. dentify social or economic development and the benefits to the reservation that will be foregone if the lowering of water quality is not allowed. The GPWRB will impose the most stringent statutory and regulatory controls for all new and existing point sources, and will impose the best management practices for non-point sources and wetland alterations. A monitoring requirement will be included in any applicable control document for bioaccumulative chemicals of concern known or

179 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 16 believed to be present in a point or non-point source discharge. Antidegradation Decision: Once the GPWRB determines that the information provided by the entity proposing to lower water quality is administratively complete, and after compliance with public notice requirements consistent with 40 CFR Part 25 and intergovernmental cooperation requirements consistent with 40 CFR Part 25, and due consideration of technical, economic, social and other criteria in the area in which the water is located, may decide to allow lower water quality if it has been adequately demonstrated that there are no prudent and feasible alternatives, and lower water quality is necessary to accommodate important social and economic development on the reservation. n no event may the decision reached under this section allow water quality to be lowered below the minimum level required to fully support existing and designated uses. 2. Outstanding Tribal Water Resources-Prohibited: Discharges will be prohibited in that portion of Lake Superior north of latitude 47 degrees, 57 minutes, 13 seconds, east of Hat Point, south of the Minnesota-Ontario boundary, and west of the Minnesota-Michigan boundary. These waters will be referred to as OTWR-Prohibited. The following two exceptions are allowed: Exemptions for response actions pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as amended, or similar Federal or Tribal authorities, undertaken to alleviate a release into the environment of substances which may pose imminent and substantial danger to public health or welfare may be allowed by the Water Resources Board. Short-term, temporary (i.e., weeks or months) lowering of water quality from sources resulting from activities meant to protect public health and welfare, or result in higher water quality in the future such as the maintenance existing roads, culverts, septic systems, boat docks and ramps, may be allowed by the Water Resources Board when there is no prudent and feasible alternative and best management practices have been imposed. V. MPLEMENTATON OF WATER QUALTY STANDARDS. NPDES PERMTS NPDES permits shall be issued by EPA to discharge to the waters of the Reservation in a manner consistent with Tribal Water Quality Standards. Chronic Aquatic Life Criteria will be applied as maximum standards not to be exceeded in waters of the Reservation. Discharges in Tribal waters are PROHBTED for:

180 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 17 The portion of the Shoreline Waters described in the 1996 Cooperative Agreement signed by the Grand Portage Band, the Minnesota Pollution Control Agency, and the US EPA, that prohibits any new or expanded discharges within Grand Portage Zone of Lake Superior from north of latitude 47 degrees, 57 minutes, 13 seconds and east of Hat Point. X. SAMPLNG AND ANALYSS. 1. Sample collection, preservation and analysis used to determine water quality and to maintain the standards set forth in the Water Quality Standards shall be performed in accordance with procedures prescribed by the latest editions of the following authorities: a. American Public Health Association, Standard Methods for the Examination of Water and Wastewater; b. Methods for Chemical Analysis of Water and Wastes ; and c. EPA Guidelines Establishing Test Procedures for Analysis of Pollutants. 2. Bacteriological Surveys: The monthly geometric mean is used in assessing attainment of standards when at least five samples are collected in a thirty-day period. When less than five samples are collected in a thirty day period, no single sample shall exceed the applicable upper limit for bacterial density set forth in these water quality standards. 3. AVERAGNG PERODS to assess attainment of the standards for the Chronic Aquatic Life Criteria will be based upon a four day average. Acute Aquatic Life Criteria shall not apply due to the implicit debilitating effects and mortality rates of aquatic organisms over a short period of time. The numeric Chronic Aquatic Life Criteria in these standards will be used in place of Acute Aquatic Life Criteria, and must not be exceeded when averaged over a 1 hr period. Monitoring for the human health and wildlife criteria will be a thirty day average. X. ENVRONMENTAL DEPARTMENT, DUTES AND RESPONSBLTES. Acting under authority delegated by the Grand Portage Reservation Water Resources Board established by the Grand Portage Water Resources Ordinance as amended in 2004, the Environmental Department will implement the Grand Portage Water Quality Standards, including the anti-degradation policy, by establishing and maintaining controls on the introduction of pollutants into waters of the Reservation. The Environmental Department will have the following duties and responsibilities: 1. Monitor water quality to assess the effectiveness of pollution controls and to determine whether water quality standards are being attained; 2. Analyze data to assess impact of effluent(s) on receiving waters, establish standards and develop approaches for pollution control;

181 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page Compile information for pollution control discharge permits and determine data collection methods to be employed in research projects and surveys; 4. Review the adequacy of the existing data base and obtain additional data when required including; a. Collect water samples from streams, rivers, lakes, processed water or water from other sources to assess pollution problems; b. Prepare samples for testing, record data, and prepare summaries for review. 5. Review project operations and coordinate water pollution control activities with other constituent agencies and other local, state and federal agencies, as appropriate; 6. Encourage voluntary implementation of best management practices to control non-point sources of pollutants to achieve compliance with the Grand Portage Reservation Water Quality Standards; 7. Require the highest and best degree of wastewater treatment practicable and commensurate with protecting and maintaining designated uses and existing water quality; 8. nvestigate complaints concerning water pollution problems; 9. Ensure compliance with the provisions for public participation required by the Clean Water Act; 10. Ensure that all dischargers and all projects that have the potential to impact water quality are in compliance with the Grand Portage Water Quality Standards. X. GENERAL STANDARDS. The following general water quality criteria will apply to all waters of the Reservation. 1. Waters must be free from suspended and submerged solids or other substances that enter the waters as a result of human activity and that will settle in the bed of a body of water to form foul smelling or otherwise objectionable deposits, or that will adversely affect aquatic life. 2. Waters must be free from floating debris, oil, scum and other floating materials entering the waters as a result of human activity in amounts sufficient to be unsightly, adversely affect uses, or cause degradation.

182 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page Waters must be free from materials entering the waters as a result of human activity producing color, odor, taste or other conditions in such a degree as to create a nuisance. 4. Waters must be free from nutrients entering the waters as a result of human activity in concentrations that create nuisance growths of aquatic weeds and algae. 5. Waters must be free from substances entering the water as a result of human activity in concentrations that are toxic or harmful to human, animal, plant or aquatic life. Toxic substances must not be present in receiving waters in quantities that are toxic to human, animal, plant or aquatic life, or in quantities that interfere with normal propagation, growth and survival of the sensitive aquatic biota. Where a numeric water quality criterion for a particular pollutant is not specified in these Water Quality Standards, the Water Resources Board will adopt EPA standards for that pollutant until a site-specific criterion for that chemical can be developed. Aquatic life will be as it naturally occurs. Ambient water quality must be sufficient to support life stages of all indigenous species. Aquatic habitat, which includes all waters of the Reservation, will not be degraded. Sediments and aquatic flora and fauna, and the use thereof, must not be impaired or endangered, the species composition will not be altered, and propagation or migration of fish and other aquatic biota normally present must not be hindered by discharge of sewage, industrial waste or other pollutants to the waters. The biological quality of any given surface water body will be assessed by comparison to the biological integrity of reference conditions which best represent the most natural condition for that surface water body type within the geographic region. The biological quality will be determined by reliable measures of indicative communities of flora and fauna. 6. Waters capable of supporting wild rice will be of sufficient quantity and quality as to permit the propagation and maintenance of a healthy wild rice ecosystem in addition to the associated aquatic life and their habitats. 7. The ph of a stream, lake, bay or river will not be permitted to fluctuate in excess of 0.5 units outside the estimated natural seasonal maximum and minimum as defined by Tribal monitoring data. 8. For waters designated as coldwater fisheries, the dissolved oxygen standard will be a minimum daily mean concentration of 9.0 mg/l when and where early life stages of cold water fish occur and 6.0 mg/l for all other coldwater aquatic life stages. For waters designated as warm water fisheries, the dissolved oxygen standard will be a minimum

183 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 20 daily mean concentration of 5.5 mg/l when and where early life stages of warmwater fish occur and 5.0 mg/l for all other warmwater aquatic life stages. Where natural conditions alone create dissolved oxygen concentrations less than 110 percent of the applicable criteria means or minima or both, the minimum acceptable concentration is 90 percent of the natural concentration. 9. Turbidity attributable to other than natural causes must not exceed 5 NTU over natural conditions as defined by Tribal monitoring data. 10. Sulfates must not exceed 10 mg/l in wild rice habitats. 11. Bacteria criteria in waters protected for primary recreational contact are based on an equation provided by USEPA. Primary contact recreational use is divided into three subcategories based upon frequency of use. f compliance is based on a monthly geometric mean than at least five samples must been collected in an equally spaced time period over thirty days. When less than five samples have been collected in a thirty-day period, the single sample shall not be exceeded. The following bacteria criteria apply to each subcategory: (a) For high intensity use of Lake Superior Coastal waters designated as D1, the bacteriological density shall not exceed a monthly geometric mean of 126 Escherichia coli per 100 ml, or a single sample maximum of 235 cfu Escherichia coli /100 ml. (b) For inland lakes and rivers that are used moderately for swimming due to remote location, dense vegetation, and mildly stained waters, designated as D2, the bacteriological density shall not exceed a monthly geometric mean of 126 Escherichia coli per 100 ml, or a single sample maximum of 299 cfu Escherichia coli /100 ml. (c) ntermittent streams and streams surrounded by sedge meadows, shallow inland lakes surrounded by floating sedge and peat mats, wetlands and bogs that are infrequently used for swimming due to highly stained waters and deep mucky substrates that create dangerous conditions for swimming are designated as D3. For these waters the bacteriological density shall not exceed a monthly geometric mean of 206 cfu Escherichia coli per 100 ml, or a single sample maximum of 940 cfu Escherichia coli /100 ml. 12. Concentrations of radioactive materials must not exceed concentrations caused by naturally occurring materials. 13. Existing mineral quality will not be altered by municipal, industrial and in-stream activities or other waste discharges so as to interfere with the designated uses for a water body. 14. There will be no material increase in the temperature of Reservation waters other than natural causes, based upon the average of temperatures taken from mid-depth or three (3) feet (whichever is less) for streams and taken from the surface to the bottom or surface to the bottom of the epilimnion if a lake is stratified.

184 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 21 The normal daily and seasonal variations present before the addition of heat, from other than natural sources, must be maintained. n no case will human-introduced heat be permitted when the maximum temperature specified for the water body (68 degrees F for cold water fisheries and 86 degrees F for warm water fisheries) would thereby be exceeded. X. NUMERC WATER QUALTY CRTERA AND METHODOLOGY. {GENERAL: f Water Quality Standards are exceeded in waters of the Reservation, it will be considered indicative of a polluted condition that is actually or potentially harmful, detrimental or injurious with respect to the designated uses and will therefore be considered a violation of the Grand Portage Water Quality Standards.} 1. NATURAL WATER QUALTY The waters of the Reservation may, in a natural condition, have water quality characteristics or chemical concentrations approaching or exceeding the water quality standards. Natural conditions exist where there is no discernable impact from point or non-point source pollutants attributable to human activity or from physical alteration of wetlands. Natural background levels are defined by water quality monitoring. Where water quality monitoring data are not available, background levels can be predicted based on data from a watershed with similar characteristics. Where natural background levels do not exceed applicable standards, the addition of pollutants from human activity and resulting point or non-point source discharges shall be limited such that, in total, the natural background levels and the additions from human activity shall not exceed the standards. When reasonable justification exists to preserve the higher natural quality of a water resource, the Water Resources Board may use the natural background levels that are lower than the applicable site-specific standards to control the addition of the same pollutants from human activity. Where background levels exceeded applicable standards, the background levels may be used as the standards for controlling the addition of the same pollutants from point and non-point source discharges in place of the standards. n the adoption of standards for individual waters of the Reservation, the Water Resources Board will be guided by the standards herein but may make reasonable modifications of the same on the basis of evidence brought forth at a public hearing if it is shown to be desirable and in the public interest to do so in order to encourage the best use of the waters of the Reservation or the lands bordering such waters.

185 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page ADDTVTY, GENERAL. f a discharge is composed of a mixture of more than one chemical and the chemicals have the same mode of toxic action, the Water Resources Board has the option to apply an additive model to determine the toxicity of the mixture using the following formula: C1 + C Cn Equals a value of one or more; a FCV1 FCV2 FCVn toxic condition may be indicated where : C1... Cn FCV1... FCVn is the concentration of the first to the nth toxicant. is the Final Chronic Value (FCV), as defined in 40 CFR 132.2, for the first to the nth toxicant. 3. RSK LEVELS AND ADDTVTY, CARCNOGENS. Concentrations of carcinogenic chemicals from point or non-point sources, singly or in mixtures, must not exceed risk levels of one chance in 1,000,000 in surface waters. Carcinogenic chemicals will be considered additive in their effect according to the following formula unless an alternative model is supported by available scientific evidence. The additive formula applies to chemicals that have a human health based standard calculated with a cancer potency factor. C1 + C Cn Equals a value of one or more, a risk level CC1 CC2 Ccn greater than 10-6 is indicated where: C1...Cn is the concentration of the first to nth carcinogen. CC1...CCn is the drinking water plus fish consumption criterion (dfcc) for the first to the nth carcinogenic chemical. For the chlorinated dibenzo-p-dioxins (CDDs) and chlorinated dibenzofurans (CDFs) listed in 40 CFR, part 132, appendix F, Table 1., potential adverse additive effects in effluents shall be accounted for in accordance with 40 CFR, part 132, appendix F, Procedure 4: Additivity. 4. STE-SPECFC WATER QUALTY CRTERA. Water quality criteria may be recalculated to reflect conditions needed to protect uses of a

186 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 23 particular water body or segment on a case-by-case basis based on site-specific information. Site-specific water quality criteria will be consistent with local fish consumption rates. Bioaccumulation factors and the formulas used for water quality criterion will be consistent with the Final Water Quality Guidance for the Great lakes System, 40 CFR 132, Appendix F, Procedure VARANCES FROM WATER QUALTY STANDARDS The Water Resources Board may grant variances from water quality standards on a caseby-case basis at least as protective as the Final Water Quality Guidance for the Great Lakes System, 40 CFR 132, Appendix F, Procedure * STANDARDS THAT VARY WTH TOTAL HARDNESS (TH) Total hardness is the sum of the calcium and magnesium concentrations expressed as calcium carbonate in mg/l. For ambient or effluent total hardness values greater than 400 mg/l, 400 mg/l must be used in the calculation of the standard. Exp. is the base e exponential function. Formula results are in μg/l. Example Standards at Hardness of: Cadmium, total CCC = exp. (0.7852[ln (TH mg/l)]-2.715) Chromium (), total CCC = exp. (0.819[ln (TH mg/l)] ) Copper, total CCC = exp. (0.8545[ln(TH mg/l]-1.702) Nickel, total CCC = exp. (0.846[ln(TH mg/l)] ) Zinc, total CCC = exp. (0.8473[ln(TH mg/l)]+0.884) ** STANDARD THAT VARES WTH ph Exp. is the base e exponential function. Formula results are in μg/l. The Chronic Standard shall not exceed the human health-based criterion of 5.5 μg/l. Example standards at ph of: Pentachlorophenol CCC = exp. (1.005[pH] 5.134)

187 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page CONVERSON FACTORS FOR TRANSFORMNG TOTAL METALS TO DSSOLVED METALS Table 2. Conversion Factors METALS CCC (μg/l) CONVERSON FACTOR Arsenic Chromium () Chromium (V) Copper Mercury 0.85 Nickel Selenium Zinc METHODOLOGY TO DEVELOP OR REVSE WATER QUALTY CRTERA Human health criteria currently listed in Table 3 and the associated bioaccumulation factors (BAFs) were derived using the methodologies in 40 CFR 132, Appendices C and B. Human health criteria were recalculated using the following modified assumptions: (a) human consumption of grams per day of fish; (b) human consumption of trophic level 3 fish is one quarter of the fish consumption total and consumption of trophic level 4 fish is three quarters of the fish consumption total; (c) a one-in-one-million cancer risk factor; and (d) the combined total of 2.01 liters per day ingestion of water (i.e. 2.0 liters per day for drinking water criteria combined with 0.01 liters per day incidental ingestion). Aquatic life criteria currently listed in Table 3 of these standards were calculated using the methodologies in 40 CFR 132, Appendix A. Wildlife criteria, and associated BAFs, listed in Table 3 of these standards were calculated using the methodology in 40 CFR 132, Appendix D and B. For future numeric criteria development or modification, or where numeric criteria are needed to implement a narrative criterion, the Grand Portage Water Resources Board will use the methodologies required by 40 CFR 132.4(a)(2) through (5) which are hereby adopted and incorporated by reference into this chapter:

188 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page Appendix A to Part 132 Great Lakes Water Quality nitiative Methodology for development of aquatic life criteria. However, Chronic Criteria will be used in place of Acute Criteria and shall not be exceeded in waters of the Reservation. 2. Appendix B to Part Great Lakes Water Quality nitiative Methodology for deriving bioaccmulation factors for development of human health and wildlife criteria. 3. Appendix C to Part 132 Great Lakes Water Quality nitiative Methodology for development of human health criteria, with the exception of the modified assumptions as stated on page 24, in the first paragraph of number 9, shall be used to calculate new or revised criteria. 4. Appendix D to Part 132 Great Lakes Water Quality nitiative Methodology for development of wildlife criteria. For pollutants listed in Table 5 of 40 CFR 132, or for any other pollutants other than those in Table 5 for which the Grand Portage Water Resources Board demonstrates that a methodology or procedure in 40 CFR 132 is not scientifically defensible, the Board shall: (a) apply methodologies or procedures acceptable under 40 CFR 131; or (b) apply alternative implementation procedures that are consistent with all applicable Grand Portage tribal laws.

189 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 26 Table 3. Numeric Criteria for Designated Uses A, B1, B2, B3, B4 SUBSTANCE OR CHARACTERSTC µg/l unless otherwise noted HUMAN HEALTH CRTERA (FSH & WATER CONSUMPTON) AQUATC LFE CHRONC CRTERA (CCC) WLDLFE CRTERA Arsenic, total 5.64E Benzene (c) Benzo(a)pyrene (c) (PAH) Beryllium (c) 9.11E E ng/l Cadmium 5.03 * Chlordane (c) Chlorobenzene 9.70E E+01 Chromium, total (TH) 1.92E+05 * Chromium V, total 2.93E Cyanides, free 1.40E DDT (c) 1.56E E-5 Dieldrin (c) 6.88E , 4 Dimethylphenol 3.18E+02 2, 4 Dinitrophenol 4.88E+01 Dioxin (2, 3, 7, 8 TCDD) (c) 9.14E E-9 Endrin 1.09E Hexachlorobenzene (c) (HCB) Hexachloroethane (c) 4.78E E-02 Lindane (gamma-bhc) 5.25E Mercury, total 1.96E E-3 Methylene Chloride (c) 4.24 Parathion Pentachlorophenol (c), (ph) 1.63E-01 * *(c) - carcinogen

190 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 27 SUBSTANCE OR CHARACTERSTC ug/l unless otherwise noted HUMAN HEALTH CRTERA (FSH & WATER CONSUMPTON) AQUATC LFE CHRONC CRTERA WLDLFE CRTERA Polychlorinated biphenyls (PCBs), total (c) 2.57E E-4 Selenium, total 9.78E Toluene Toxaphene (c) 7.40E E-07 Trichloroethylene (c) 1.80 *(c) - carcinogen XV. ENFORCEMENT AND CVL PENALTES. These water quality standards shall be enforced in accordance with the Clean Water Act and this Chapter XV. For any violation of these water quality standards that is not enforceable by the Band through the certification process of the Clean Water Act (33 U.S.C. 1341), the following procedures shall apply: 1. Violation of the water quality standards. Any person who acts to violate these water quality standards or who acts to cause a violation of these water quality standards shall be subject to penalties as well as any other actions set forth herein. n the event of a violation of the water quality standards, the Tribal Water Resources Board shall serve the alleged violator, in person or by certified mail, with a notice of violation. The notice of violation shall state which provisions of the water quality standards are allegedly being violated, and the action that must be taken to correct such violation (including the time within which action must be taken), as well as federal or Band provisions or regulations mandating that such action be taken. 2. Order to cease activity. n the event of non-compliance with any notice of violation, the Tribal Water Resources Board may order the cessation of the activity causing the violation of the water quality standards without additional notice to the alleged violator. The

191 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 28 alleged violator shall be served with a statement of reason(s) for the cessation order, and the actions the alleged violator must take before the order will be lifted. A copy of this cessation order and a statement of reason(s) for the order shall be delivered to the Chairperson of the Grand Portage Band of Chippewa within 5 days of its issuance. 3. Remedies. n the event an alleged violator fails to take action in accordance with the cessation order served pursuant to this Chapter, the Tribal Water Resources Board may pursue one or more of the following remedies: a. continue its cessation order; or b. assess penalties as set forth in XV (4) herein; and take any other action deemed appropriate, so long as the rights of due process guaranteed by the ndian Civil Rights Act, 25 U.S.C et seq., and the Constitution of the Minnesota Chippewa Tribe, Article X (applicable to members only) are upheld. 4. Civil penalties. Any person found violating this Chapter shall be subject to civil penalties by the Tribal Water Resources Board of up to five thousand dollars ($5,000.00) per day for each day of such violation or continued violation of a cessation order. The Tribal Water Resources Board shall personally, or via certified United States mail, first class, serve the alleged violator with notice of penalty. The penalty shall be due and payable to the Grand Portage Band of Chippewa within twenty days of such notice. Failure to pay any penalties imposed shall be considered an additional violation of this Chapter. 5. Appeals. Any person aggrieved by any action taken by the Tribal Water Resources Board may appeal to the Grand Portage Band Tribal Court in accordance with the Rules of Procedure for that Court. The filing of an appeal shall not stay any cessation order or any order to pay penalties unless a stay is granted by the Tribal Court. The Tribal Court may reverse a decision of the Tribal Water Resources Board only if the appealing party can show by clear and convincing evidence that the Tribal Water Resources Board abused its discretion in the decision making

192 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 29 process, or acted arbitrarily or capriciously. 6. Sovereign immunity. The Grand Portage Band of Chippewa hereby waives its sovereign immunity from suit for the express and limited purpose of enforcing these water quality standards. This waiver of sovereign immunity is expressly limited to the enforcement procedures contained in this Section only, which are exclusively as follows: a. administrative enforcement by the Tribal Water Resources Board through: (1) the issuance of notices of violation; (2) the issuance of cessation orders, (3) civil penalties; and b. judicial enforcement by the Tribal Water Resources Board through the issuance of declaratory and injunctive relief in the Grand Portage Band of Chippewa Tribal Court. No other relief shall be available under this express and limited waiver of sovereign immunity. This waiver shall not extend to enforcement of these water quality standards in any forum other than the Grand Portage Band of Chippewa Tribal Court nor for any purpose other than the specific enforcement procedures cited in this Section XV. The limited waiver of sovereign immunity contained in this Section XV (6) shall extend to the agencies, departments, committees, and other sub-entities of the Grand Portage Band of Chippewa. 7. Severability. f any clause, sentence, paragraph, Section, or part of this Chapter shall, for any reason, be adjudicated by any court of competent jurisdiction, to be invalid or unconstitutional, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, Section or part thereof directly involved in the controversy in which the judgment shall have rendered. 8. Construction. This Chapter shall be interpreted and applied consistent with all other Codes, Laws, Ordinances, and Regulations of the Grand Portage Band of Chippewa.

193 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 30 ATTACHMENT 1

194 S-45 Grand Portage Reservation Water Quality Standards Final version as of May 24, 2005, with revised criteria adopted August 8, 2006, and appended variance from mercury criteria Page 31 ATTACHMENT 2 Grand Portage Variance from Human Health and Wildlife Mercury Criterion Location mplementation Procedures Designated Uses Mercury Criterion to Protect Designated Uses Variance Concentration Limit Grand Portage Bay OTWR- Restricted. B. Aquatic Life 1. Cold Water Fishery 908 ng/l 4.7 ng/l Grand Portage Bay OTWR- Restricted. B. Aquatic Life 2. Subsistence Fishing ng/l 4.7 ng/l Grand Portage Bay OTWR- Restricted. C. Wildlife 1.3 ng/l 4.7 ng/l

195 S-46 Presented below are water quality standards that are in effect for Clean Water Act purposes. EPA is posting these standards as a convenience to users and has made a reasonable effort to assure their accuracy. Additionally, EPA has made a reasonable effort to identify parts of the standards that are not approved, disapproved, or are otherwise not in effect for Clean Water Act purposes.

196 S-46 FOND DU LAC BAND OF LAKE SUPEROR CBPPEWA WATER QUALTY STANDARDS OF THE FOND DU LAC RESERVATON ORDNANCE # 12/98, as amended Adopted by Resolution # 1403/98 of the Fond du Lac Reservation Business Committee on December 10, 1998 Amended by Resolution # 1286/01 of the Fond du Lac Reservation Business Committee on September

197 CSAPTJZRl CHAPTER 2 CHAPTER3 CHAPTER4 CHAPTER5 cbapter6 CRAPTER7 CHAPTER8 CRAPTERS CHAPTER10 APPENDX1 APPENDX2 APPENDX3 TABLE OFCONTENTS AUTBORTY, PURPOSE AND SCOPE.... DEFNTONS _.. _ GENERAL STANDARDS AND DESGNATED USES _ 16 DESGNATED USES APPLCABLE TO RESERVATON NATER8 *...21 SAMPLNGANDANALYSS WATERQUALTY STANDARDSANDCRTERA STE SPECFC WATER QUALTY STANDARDS ANDCRTERA...~~ S-46 MXNG ZONES AND VARANCES.... _ ENFORCRMEWT 6 PROSECUTON.., AMEWDMENTSANDSFWF.RABLTY STANDARDS SPECFC TO DESGNA!FED USES STANDAPDSTtiTVARYWTHTOTALBARDNESS BAClWlOLOGCALSTAND~S

198 FOND DU LAC BAND OF LAKE SUPEROR CBPPEWA WATER QUALTY SThDARDS OF THE FOND DU LAC RESERVATON Section 101 ORDNANCE # 12/98 CHAPTER1 AUTHORTY, PURPOSE AND SCOPE Authority This Ordinance is enacted pursuant to the inherent sovereign authority of the Fond du Lac Reservation Business Committee (Reservation Business Committee), as the.governing body of the Fond du Lac Band of Lake Superior Chippewa, as granted by Article V of the Revised Constitution of the Minnesota Chippewa Tribe, and as recognized under the Treaty of LaPointe, 10 Stat. 1109, under Section 16 of the ndian Reorganization Act, 25 U.S.C , and under sections 303 and 518 of the Clean Water Act, 33 U.S.C & Section 102 Pllmse The purpose of this Ordinance is to protect the health and welfare of.the Fond du Lac Band and other residents of the Fond du Lac Reservation through: a. The designation of uses for which the waters of the Fond du Lac Reservation shall be protected; b. The establishment of water quality criteria in order to attain and sustain those designated uses; and C. The protection and enhancement of fish and other aquatic life and wildlife on and near the Fond du Lac Reservation. Section 103 ssc?er The water quality standards established under this Ordinance shall apply to all waters of the Fond du Lac Reservation, including wetlands. The standards will be applied to activities on the Reservation which may impact the quality of waters upon, under, flowing through or adjacent to the Fond du Lac Reservation, and shall be the primary basis for managing discharges attributable to point and non-point sources of pollution. 2 S-46

199 S-46 Section 104 Reservation of Rights The Reservation Business Committee reserves the right to amend or repeal all or any part of this Ordinance at any time. All the rights, privileges, or immunities conferred by this Ordinance or by acts done pursuant thereto shall exist subject to the power of the Reservation Business Committee. Nothing in this Ordinance shall be construed to constitute a waiver of the sovereign immunity of the Fond du Lac Band or a consent to jurisdiction by any forum not expressly authorized to exercise jurisdiction under this Ordinance. The water quality standards established under this Ordinance are not intended to control, and shall not be invalidated by, natural background phenomena or acts of God. Any proposed changes or revisions to these standards shall be preceded by a public notice in a local newspaper and a minimum forty-five consecutive day comment period. During this comment period, any Band member or other interested persons may request a public hearing prior to adoption of such changes or revisions by the Reservation Business Committee. Upon approval of a public hearing request, the Reservation Business Committee shall by public notice in a local newspaper announce the date, time and location of such public hearing and said public notice shall be published at least forty-five consecutive days prior to the public hearing. Any reports, documents and data relevant to the discussion at the public hearing shall be available at least thirty days before the hearing. These standards shall be revrewed and updated, as necessary and appropriate, by the Reservation Business Committee at least once every three years. Prior to such action, any proposed changes or revisions to these standards shall be preceded by a public notice in a local newspaper and a minimum forty-five consecutive day comment period. n addition, the Reservation Business Committee shall conduct a public hearing to obtain comments on these standards and there shall be public notice in a local newspaper to announce the date, time and location of such public hearing. The public notice shall be published at least forty-five consecutive days prior to the public hearing. Any reports, documents and data relevant to the discussion at the public hearing shall be available at least thirty days before the hearing.

200 Section 105 Antidearadation Policy and Wlementation The Reservation Business Committee hereby declares the following anti-degradation policy for all waters on or adjacent to the Fond du Lac Reservation: a. Policy 1. Existing instream water uses, as defined pursuant to 40 C.F.R. Part 131, and the level of water quality necessary to protect existing uses shall be maintained and protected. No further water quality degradation which would interfere with or become injurious to existing or designated uses shall be permitted. 2. Waters in which the existing quality surpasses, on a pollutant by pollutant basis, the standards prescribed under this Ordinance, and unequivocally attains those levels necessary to support and maintain existing water uses, aquatic and wetland habitats, and wildlife and recreation in and on the water, are considered high quality for the purposes of this antidegradation policy and implementation procedures. 3. Degradation of water quality shall not be permitted where it will be injurious to existing or designated uses. The Reservation Business Committee or appropriate permitting authority shall impose the most stringent regulatory controls for all new and existing point sources, and shall impose cost effective and reasonable best management practices for non-point sources and wetland alterations. 4. For waters identified as high quality under 105.a.2 of this Ordinance, the Fond du Lac Reservation Business Committee, after appropriate public notice and intergovernmental coordination requirements and after due consideration of such technical, economic, social and other criteria in the area in which the water is located, may choose to allow lower water quality, where lower water quality is determined to be necessary to support important social and economic development. 5. Waters proposed in this Ordinance as Outstanding Reservation Resource Waters (ORRW) shall be designated as such upon approval of this Ordinance and maintained and protected. Waters may be designated an ORRW because of exceptional cultural, aesthetic, recreational or ecological significance. Upon approval of this Ordinance, other waters may 4 S-46

201 b. S-46 be designated ORRW as determined by the Reservation Business Committee after at least one public hearing. Water quality in ORRWs shall be maintained and protected without degradation. 6. n situations giving rise to potential water quality impairment due to a thermal discharge, the Reservation Business Committee shall implement the anti-degradation policy through regulations consistent with Section 316 of the Clean Water Act, as amended, 33 U.S.C mplementation 1. Lowerina of Water Quality A significant Lowering of Water Quality is defined as: 1) the projected or observed diminished chemical or biological integrity of Reservation surface waters as established by the Fond du Lac Environmental Program through the collection and analysis of baseline biological data, and the determination of reference conditions for such surface waters; or, 2) a new or increased loading of a pollutant from any regulated existing or new facility, either point source or nonpoint source, for which there is a control document or reviewable action, as a result of any activity including, but not limited to: A. B. C. D. E. Construction of a new regulated facility or modification of an existing regulated facility such that a new or modified control document is required; Modification of an existing regulated facility operating under a current control document such that the production capacity of the facility is increased; Addition of a new source of untreated or pretreated effluent containing or expected to contain any pollutant to an existing wastewater treatment works, whether public or private; A request for an increased limit in an applicable control document; and Other deliberate activities that, based on the information available, could be reasonably expected to result in an increased loading of any pollutant to any waters of the Fond du Lac Reservation. 5

202 2. Review of Antideuradation Demonstrations For all waters, the Reservation Business Committee shall ensure that the level of water quality necessary to protect existing uses is maintained. n order to achieve this requirement, and consistent with 40 C.F.R. Part 132, water quality standards use designations must include all existing uses. Controls shall be established as necessary on point and nonpoint sources of pollutants to ensure that the criteria applicable to the designated use are achieved in the water and that any designated use of a downstream water is protected. Where water quality does not support the designated uses of a waterbody or ambient pollutant concentrations exceed water quality criteria applicable to the waterbody, the Reservation Business Committee shall not allow a lowering of water quality for the pollutant or pollutants preventing the attainment of such uses or exceeding such criteria. 3. Outstandina Reservation Resource Waters (ORRW) For water designated as ORRW, the Reservation Business Committee or appropriate permitting authority shall ensure, through the application of appropriate controls on point and non-point pollutant sources, that water quality is maintained and protected. A short-term, temporary exemption may be permitted. Any regulated activity that has the potential to cause or contribute to any lowering of water quality in a water designated by the Reservation Business Committee as an ORRW is inconsistent with the intent of this Ordinance. 4. Eiah Oualitv Waters For high quality waters, the Reservation Business Committee shall ensure, or request the appropriate permitting authority to ensure, that no action resulting in a lowering of water quality occurs unless an antidegradation demonstration has been completed and the information thus provided is determined by the Reservation Business Committee to adequately support the lowering of water quality. The Reservation Business Committee or appropriate permitting authority shall establish conditions in the control document applicable to the regulated activity that prohibit the regulated activity from undertaking any deliberate action, such that there would be an increase in the rate of mass loading of any BCC or other pollutant, unless an 6 S-46

203 S-46 antidegradation demonstration is provided to the Reservation Business Committee and approved. mposition of limits due to improved monitoring data or new water quality criteria or values, or changes in loadings of any BCC within the existing capacity and processes, and that are covered by the existing applicable control document, are not subject to an antidegradation review. For BCCs known or believed to be present in a discharge, from a point or nonpoint source, a monitoring requirement shall be included in the control document. The control document shall also include a provision requiring the source to notify the Reservation Business Committee and appropriate permitting authority of any increased loadings. Upon notification, the Reservation Business Committee or appropriate permitting authority shall require actions as necessary to reduce or eliminate the increased loading. 0. Antidearadation Demonstration Any entity seeking to lower water quality in a high quality water or create a new or increased discharge of bioaccumulative substances of immediate concern must first submit an antidegradation demonstration for consideration and approval or disapproval by the Reservation Business Committee. The antidegradation demonstration shall include, but may not be limited, to the following: 1. Pollution Prevention Alternative Analysis. dentify any cost-effective pollution prevention alternatives and techniques that are available to eliminate or significantly reduce the extent to which the increased loading results in a lowering of water quality; 2. Alternative or Enhanced Treatment Analysis. dentify alternative or enhanced treatment techniques that are available that would eliminate the lowering of water quality and their costs relative to the cost of treatment necessary to achieve the applicable effluent limitations; and 3. Social and Economic Analysis. dentify the social and economic development benefits to the area in which the waters are located that will be foregone if the lowering of water quality is not allowed.

204 d. Antidearadation Decision S-46 Once the Reservation Business Committee determines the information provided in an antidegradation demonstration is administratively complete, the Reservation Business Committee shall use that information to determine whether or not the lowering of water quality is necessary and, if necessary, whether or not the lowering of water quality will support important social and economic development goals. f the proposed lowering of water quality is either not necessary, or will not support important social and economic development goals, the Reservation Business Committee shall deny the request to lower water quality. f the lowering of water quality is necessary, and will support important social and economic development goals, the Reservation Business Committee may approve all or part of the proposed lowering to occur as necessary. Prior to issuing a decision, the Reservation Business Committee shall publish a notice in a local newspaper and provide a minimum forty-five consecutive day comment period. During this comment period, any Band member or other interested persons may request a public hearing of such changes or revisions by the Reservation Business Committee. Upon approval of a public hearing request, the Reservation Business Committee shall by public notice in a local newspaper announce the date, time and location of such public hearing and said public notice shall be published at least forty-five consecutive days prior to the public hearing. The Reservation Business Committee shall send a notice of the public hearing to all identified interested and affected persons and parties at least forty-five consecutive days prior to the public hearing. Any reports, documents and data relevant to the discussion at the public hearing shall be available at least thirty days before the hearing. n no event may the decision reached by the Reservation Business Committee allow the water quality to be lowered below the minimum level required to fully support existing and designated uses. Final decisions on requests to lower water quality shall be issued by the Reservation Business Committee within 90 days of the public comment period.

205 S-46 CHAPTER2 DEFNTONS Section 201 General Definitions The following definitions shall apply to the terms of this Ordinance: a. Acute toxicity shall mean concurrent and delayed adverse effect(s) that results from an acute exposure and occurs within any short observation period which begins when the exposure begins, may extend beyond the exposure period, and usually does not constitute a substantial portion of the life span of the organism. b. Aesthetics shall mean a stream, reach, lake or impoundment with an exceptional beauty or found representing the traditional value system of the Fond du Lac Band of Chippewa as determined by the Fond du Lac Reservation Business Committee. c. Antidearadation shall mean the policy set forth in the water quality regulations under the Clean Water Act, as establishedbythe United States Environmental Protection Agency, whereby existing and future uses and the level of water quality necessary to maintain those uses is maintained and protected. (See 40 C.F.R ). d. Aauatic biota shall mean animal and plant life in the water. e. Bioaccumulation Factor (BAF) shall mean the ratio (in L/kg) of a substance's concentration in tissue of an aquatic organism to its concentration in the ambient water, in situations where both the organism and its food are exposed and the ratio does not change substantially over time. f. Bioaccumulative Chemical of Concern BCC1 shall mean any chemical that has the potential to cause adverse effects which, upon entering surface waters, by itself or as its toxic transformation product, accumulates in aquatic organisms by a human health bioaccumulation factor greater than 1000, after considering metabolism and other physicochemical properties that might enhance or inhibit bioaccumulation, in accordance with the methodology in appendix B of 40 C.F.R. Part 132. Chemicals with halflives of less than eight weeks in the water column, 9

206 sediment, and biota are not BCCs. The minimum BAF information needed to define an organic chemical as a BCC is either a field-measured BAF or a BAF derived using the BSAF methodology. The minimum BAF information needed to define an inorganic chemical, including an organometal, as a BCC is either a field-measured BAF or a laboratorymeasured BCF. BCCs include, but are not limited to, the pollutants identified as BCCs in Section A of Table 6 of 40 C.F.R. Part 132. g. Bioaccuumlative Substances of mmediate Concern (BSC) shall mean the list of substances identified in the September, 1991 Bi-National Program to restore and protect the Lake Superior Basin. They include: 2, 3,, 8-TCDD; octachlorostyrene; hexachlorobenzene; chlordane; dieldrin, DDT, DDE, and other metabolites; toxaphene; PCBs; and mercury. Other chemicals may be added to the list following assessments of environmental effects and impacts after public review and comment. h. Bioconcentration factor (BCF) shall mean the ratio in L/kg of a substance's concentration in tissue of an aquatic organism to its concentration in the ambient water, in situations where the organism is exposed through the water only and the ratio does not change substantially over time. 1. Biolouical intearity shall mean a balanced, integrated, adaptive community of organisms having a species composition, diversity, and functional organization comparable to that of the natural habitat of the region. j. Biota-Sediment Accumulation Factor (BSAF) shall mean the ratio (in kg of organic carbon/kg of lipid) of a substance's lipid-normalized concentration in tissue of an aquatic organism to its organic carbon-normalized concentration in surface sediment, in situations where the ratio does not change substantially over time, both the organism and its food are exposed, and the surface sediment is representative of the average surface sediment in the vicinity of the organism. k. Carcinocren shall mean a substance which causes an increased incidence of benign or malignant neoplasms, or substantially decreases the time to develop neoplasms, in animals or humans. 1. Chronic standard tcs) shall mean the highest water concentration of a toxicant to which organisms can be exposed indefinitely without causing chronic toxicity. m. Chronic toxicitv shall mean the concurrent and delayed adverse effect(s) that occurs only as a result of a chronic exposure. 10 S-46

207 n. Cold water fisheries shall mean a stream, reach, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and propagation of cold water fish and other aquatic life, or serving as a spawning or nursery area for cold water fish species. Examples of cold water fish include brook trout and rainbow trout. 0. Control Document shall mean any authorization issued by the Reservation Business Committee or appropriate permitting authority to any source of pollutants to waters under its jurisdiction that specifies conditions under which the source is allowed to operate. P- Desisnated uses shall mean those uses set forth in the water quality standards herein. 9. Dissolved oxvcen shall mean the amount of oxygen dissolved in' water expressed as a concentration in milligrams per liter. r. Effluent shall mean discharges into surface waters from other than natural sources. 5. Existina Discharcer shall mean any building, structure, facility or installation from which there is or may be a "discharge of pollutants," as defined in 40 C.F.R , to the Lake Superior Basin, that is not a new discharger. t. Excanded Discharae shall mean a discharge of a pollutant to a Reservation surface water in the Lake Superior Basin that changes in volume, quality, location, or any other manner after either: the effective date the water was designated as an Outstanding Reservation Water; or the effective date of this Ordinance if the water was designated as a High Quality Water. n determining whether an increased loading would result from the change in the discharge, the Reservation Business Committee shall compare the loading that would result from the change with the loading that exists as of the effective date specified above, whichever applies. u. Final acute val& (FAV) is (a) a calculated estimate of the concentration of a test material such that 95 percent of the genera (with which acceptable acute toxicity tests have been conducted on the material) have higher Genus Mean Acute Values (GMAVs), or (b) the Species Mean Acute Value (SMAV) of an important and/or critical species, if the SMAV is lower than the calculated estimate. v. Fishery shall mean a balanced, diverse community of fishes controlled by the water quality, quantity and habitat of a waterbody. 11 S-46

208 . x. Y- a. aa. bb. cc. dd. ee. ff. S-46 Genus mean acute value (Q4AV) shall mean the geometric mean of the SMAVs for the genus. GL Pollutant shall mean a toxic pollutant listed as a pollutant of initial focus in the Great Lakes nitiative (GL) Guidance, 40 C.F.R. Part 132, Table 6, as amended through March 12, GL Guidance shall mean the Water Quality Guidance for the Great Lakes System, 40 C.F.R. Part 132, as amended through March 12, Hiuh Oualitv Waters shall mean surface waters of the Reservation in which, on a parameter by parameter basis, the quality of the waters exceeds levels necessary to support propagation of fish, shellfish, and wildlife and recreation in and on the water. Human cancer value (ECV) is the maximum ambient water concentration of a substance at which a lifetime of exposure from either: drinking the water, consuming fish from the water, and water-related activities: or consuming fish from the water, and water-related recreation activities, will represent a plausible upperbound risk of contracting cancer of one in 100,000 using the exposure assumptions specified in the Methodologies for the Development of Human.Health Criteria and Values specified in appendix C of 40 C.F.R Part 132. Human noncancer value UNV) is the maximum ambient water concentration of a substance at which adverse noncancer effects are not likely to occur in the human population from lifetime exposure via either: drinking the water, consuming fish from the water, and water-related activities: or consuming the fish from the water, and water-related activities, using the Methodologies for the Development of Human Health Criteria and Values in appendix C of 40 C.F.R Part 132. ndiaenous shall mean produced, growing or living naturally in a particular region or environment. Maximum standard (MS) shall mean the highest concentration of a toxicant in water to which aquatic organisms can be exposed for a brief time with zero to slight mortality. The MS equals the FAV divided by two. Milligrams pet liter (mu/l) shall mean the concentration at which one milligram is contained in a volume of one liter; one milligram per liter is equivalent to one part per million (ppm) at unity density. tixina zone shall mean a limited area or volume of water where initial dilution of a discharge takes Place and 12

209 w. hh. ii. jj. kk. 11. mm. nn. 00. PP. S-46 where numeric water quality criteria can be exceeded but acutely toxic conditions are prevented. Narrative standard shall mean a standard or criterion expressed in words rather than numerically. Natural backaround shall mean characteristics that are not man induced that relate to water quality; the levels of pollutants present in ambient water that are from natural, as opposed to human-induced, sources. New Discharue shall mean a discharge that was not in existence on the effective date of this Ordinance. Nephelometric turbiditv units (WTU) shall mean a measure of turbidity in water. Non-Point source shall mean a source of pollution that is not a discernible, confined and discrete conveyance; a diffuse source which flows across natural or manmade surfaces, such as run-off from agricultural, construction, mining or silvicultural activities or from urban areas. Nutrient shall mean a chemical element or inorganic compound taken in by green plants and used in organic synthesis. Outstandinu reservation resource raters (ORRW) shall mean those waters of the highest quality that are designated by the Reservation Business Committee for their uniqueness or ecological sensitivity. Waters may be designated as ORRW because of their exceptional cultural, aesthetic, recreational or ecological significance. a shall 'mean the negative logarithm of the effective hydrogen ion concentration in gram equivalents per liter; a measure of the acidity or alkalinity of a solution, increasing with increasing alkalinity and decreasing with increasing acidity. Point source shall mean any discernible, confined and discrete conveyance from which pollutants are or may be discharged into a water body. Pollutant, shall mean dredged spoil, solid waste, incinerator residue, filter backwash, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, heat, wrecked or discarded equipment, rock, sand, cellar dirt and industrial, municipal and agricultural waste discharged into water. Primarv contact recreational shall mean the recreational use of a stream, reach, lake or impoundment involving 13

210 rr. 55. tt. vv. ww. xx. YY. S-46 prolonged contact and the risk of ingesting water in quantities sufficient to pose a health hazard. Examples are swimming and water skiing. Public water SUDD~V shall mean a stream, reach, lake or impoundment specifically designated by the Fond du Lac Reservation Business Committee as suitable to provide an adequate supply of drinking water for the continuation of the health and well-being of the residents of the Fond du Lac Reservation. Reservation Business Committee shall mean the governing body of the Fond du Lac Band of Lake Superior Chippewa. Secondarv contact Recreational shall mean the recreational use of a stream, reach, lake or impoundment in which contact with the water may, but need not, occur and in which the probability of ingesting water is minimal. Examples are fishing and boating. Species mean acute value (SMAVl is the geometric mean of the results of all acceptable flow-through acute toxicity tests (for which the concentrations of the test material were measured) with the most sensitive tested life stage of the species. For a species for which no such result is available for the most sensitive tested life stage, the SMAV is the geometric mean of the results of all acceptable acute toxicity tests with the most sensitive tested life stage. Total Maximum Dailv Loan C%5X shall mean the sum of the individual wasteload allocations for point sources and load allocations for nonpoint sources and natural background. A TMDL sets and allocates the maximum amount of a pollutant that may be introduced into a water body and still assure attainment and maintenance of water quality standards. Toxic shall mean harmful to living organisms. Toxicity shall mean the state or degree of being toxic or poisonous, lethal or sub-lethal adverse effects on representative sensitive organisms, due to exposure to toxic materials.' Toxic unit means a measure of acute or chronic toxicity in an effluent. One acute toxic unit (Tua) is the reciprocal of the effluent concentration that causes 50 percent effect of mortality to organisms for acute exposures (loo/lcso); one chronic toxic unit (Tut) is the reciprocal of the effluent concentration that causes no observable effect concentration on test organisms for chronic exposures (loo/noec). 14

211 zz. Turbidity shall mean a measure of the amount of suspended material, particles or sediment which has the potential Ear adverse impacts on aquatic biota. aaa. Warm water fisheries shall mean a stream, reach, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and propagation of warm water fish and other aquatic life, or serving as a spawning or nursery area for warm water fish species. Examples of warm water fish species include large mouth bass and bluegills. bbb. Waste Loadina Allocation (WLA) shall mean the portion of a receiving water's loading capacity that is allocated to one of its existing or future point sources of pollution. A WLA is the allocation for an individual point source that ensures that the level of water quality to be achieved by the point source is derived from and complies with all applicable water quality standards. ccc. Water aualitv monitoring shall mean an integrated assessment of water quality that incorporates physical, chemical and biological components. ddd. Whole-effulent toxicity (WET) shall mean the total toxic effect of an effulent measured directly with a toxicity test. eee. Wild rice areas shall mean a stream, reach, lake or impoundment, or portion thereof, presently, historically or that has the potential to sustain the growth of wild rice. fff. WQBEL shall refer to water quality-based effluent limits. 15 S-46

212 Section 301 CHAPTER3 GENERAL STANDARDS AND DESGNATED USES General Standards To every extent practical and possible, as determined by the Reservation Business Committee, the following general water quality criteria shall apply to all waters of the Fond du Lac Reservation; provided, however, that where more stringent standards for designated water bodies are set, the stricter standards supersede the general standards: a. Reservation waters shall be free from suspended and submerged solids or other substances that enter the waters as a result of human activity and that will settle in the bed of a body of water or be deposited upon the shore of that body of water to form putrescent or otherwise objectionable deposits, or that will adversely affect aquatic life. b. Reservation waters shall be free from floating debris, oil, scum and other floating materials entering the waters as a result of human activity in amounts sufficient to be unsightly or cause degradation. C. Reservation waters shall be free from material entering the waters as a result of human activity producing color, odor, taste or other conditions in such a degree as to create a nuisance. d. Reservation waters shall be free from nutrients (nitrogen and phosphorus) entering the waters as a result of human activity in concentrations that create nuisance growths of aquatic weeds and algae. e. Reservation waters shall be free from substances entering the waters as. a result of human activity in concentrations that are toxic. For toxic substances lacking a published numeric criteria in these water quality standards, criteria will be derived as necessary using the procedures contained in the Final Water Quality Guidance for the Great Lakes System, 40 C.F.R. Part 132. Where there are insufficient data to derive a criterion, the procedures in the Final Water Quality Guidance for the Great Lakes System, 40 C.F.R. Part 132, shall be used to derive a secondary value to protect aquatic life and human health. The 16 S-46

213 S-46 followingmethodologies, including future amendments, for developing, criteria (Tier and Tier ) to protect aquatic life, human health, and wildlife, and the bioaccumulation factors for calculating human health and wildlife standards, are adopted and incorporated by reference into this chapter: ;;;at Lakes Water Quality nitiative Methodology Development of Aquatic Life Criteria and Values, 40 C.F.R. Part 132, Appendix A, as amended through March 12, 1997, except that the daily human consumption of fish by Fond du Lac band members is assumed to be kg/day. Great Lakes Water Quality nitiative Methodology for Deriving Bioaccumulation Factors, 40 C.F.R. Part 132, Appendix B, as amended through March 12, 1997, except that for human health standards and criteria, the baseline BAF is multiplied by the following lipid fractions which apply to fish in both trophic levels 3 and 4: 0.06 for Class A, B, and Cl waters, and for Class C2. Great Lakes Water Quality nitiative Methodology for Development of Human Health Criteria.and Values, 40 C.F.R. Part 132, Appendix C, as amended through March 12, Great Lakes Water Quality nitiative Methodology for Development of Wildlife Criteria, 40 C.F.R. Part 132, Appendix D, as amended through March 12, U.S. EPA "Technical Support Document for Water Quality Based Toxics Control;" U.S. EPA Region V "Permitting Strategy;" and U.S. EPA "Quality Criteria for Water, 1986." For substances where numeric criteria have not been adopted for the public water supply use, these narrative water quality criteria shall be implemented considering any drinking water standards or health advisories issued by the U.S. Environment-d1 Protection Agency under the Safe Drinking Water Act. f. The ph of a stream, lake or reservoir shall not be permitted to fluctuate in excess of 1.0 unit over a period of twenty-four (24) hours for other than natural causes. g. f a stream or lake is capable of supporting aquatic life, the dissolved oxygen standard will be a daily minimum of 5 mg/l for other than natural causes. For 17

214 h. 1. j. k. 1. m. waters designated as cold water fisheries, the dissolved oxygen criterion will be a daily minimum of 8 mg/l to Protect early life stages of cold water fish (enabling a required intergravel dissolved oxygen concentration of 5 mg/l). This criterion applies only when and where these early life stages occur. Settleable and suspended solids (turbidity) should not reduce the depth of the compensation point for photosynthetic activity by more than 10 percent from the seasonally established norm for aquatic life Concentrations of radioactive materials shall not exceed concentration caused by naturally occurring materials. Existing mineral quality shall not be altered by municipal, industrial and in-stream activities or other waste discharges so as to interfere with the designated uses for a water body. The introduction of heat by other than natural causes shall not increase the temperature of Reservation waters by more than three degrees Fahrenheit from ambient temperatures for Reservation lakes, and five degrees Fahrenhei.t from ambient temperatures for Reservation streams above that which existed before the addition of heat, based upon the monthly average of daily maximum temperature. The normal daily and seasonal variations that were present before the addition of heat from other than natural sources, and which are outside the mixing zone, shall be maintained. No material increase in temperature shall be allowed from man-introduced heat for receiving waters classified as Cl coldwater, applied as a matter of practice at the edge of the mixing zone. ~11 naturally occurring biological communities and the habitat needed to support them, as determined by sampling, data analysis and establishment of reference conditions shall be maintained and protected in all waterways and wetlands of the Reservation. my lake or stream which supports wild rice growth shall not exceed instantaneous maximum sulfate levels of 10 milligrams per liter. 18 S-46

215 . Section 302 Standards of Desianated Use The following standards of designated waters of the Fond du Lac Reservation: a. b. c. d. use shall apply to the Public water supply: A scream, reach, lake or impoundment specifically designated by the Reservation Business Committee as suitable to provide an adequate supply of drinking water for the continuation of the health and well-being of the residents of the Fond du Lac Reservation. Wildlife: All surface waters capable of providing a water supply, vegetative habitat and prey for the support and propagation of wildlife located within the Fond du Lac Reservation. Aouatic life: 1. Cold Water Fisheries: A stream, reach, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and propagation of cold water fish and other aquatic life, or serving as a spawning or nursery area for cold water fish species. Examples of cold water fish include brook trout and rainbow trout. 2. Warm rater fisheries: A stream, reach, lake or impoundment where water temperature, habitat and other characteristics are suitable for support and propagation of warm water fish and other aquatic life, or serving as a spawning or nursery area for warm water fish species. Examples of warm water fish species include large mouth bass and bluegills. 3. Subsistence fishinu (nettinq): That portion of the Fond du Lac Reservation necessary to provide a sufficient diet of fish in order to sustain a healthy, current, on-reservation population, including any stream, reach, lake or impoundment where spearing, netting or bow fishing is allowed as provided under applicable Band conservation laws. Recreation: 1. Primam contact recreational.: The recreational use of a stream, reach, lake or impoundment involving prolonged contact and the risk of ingesting water in quantities sufficient to pose a health hazard. Examples are swimming and water skiing. 19 S-46

216 2. Secondarv contact recreational: The recreational use of a stream, reach, lake or impoundment in which contact with the water may, but need not, occur and in which the probability of ingesting water is minimal. Examples are fishing and boating. 8. Cultural: 1. Wild rice areas : A stream, reach, lake or impoundment, or portion thereof, presently, historically or with the potential to be vegetated with wild rice. 2 Aesthetic waters: A stream, reach, lake or impoundment which has been determined by the Reservation Business Committee to possess exceptional beauty or be significant to the preservation or exercise of the traditional value system of the Fond du Lac Band of Lake Superior Chippewa, which may include but is not limited to primary (direct) contact with water or the preservation of wetlands for the maintenance of traditional medicinal plants. f. Aaricultural: The water quality is adequate for uses in irrigation and livestock watering. Q- Naviaation: The water quality is adequate for navigation in and on the water. h. Commercial: The water quality is adequate for use(s) as commercial water supply for business processes. 20 S-46

217 CHAPTER4 DESGNATED USES APPLCABLE TO RESERVATON WATERS Bang 48N 19w Big Lake 49N 18W Cedar 49N 18W Dead Fish* TOWNSHP RANGE SECTON DESGNATED USE 49N East Twin 50N 18W 23, 24, 25, 26 First Lake 49N 17w 21 Hardwood Jaskari* Lac Lost Martin (Jo Martin) 49N 48N 49N 49N SON 50N 21 18W 19w 19w 19w 18W 19w 1, 2 20, 21, 28, 33 10, 15 1, 12 5, 6 1, 2, 36 12, , 30 13, 14, 23 6 B, C2, Dl, D2, El, F, G, H B, C2, C3, Dl, D2, F, G, H B, C2, Dl, El, F, G, H B, C2, Dl, El, F, G, H B, C-2, Dl, El, F, G, H B, F, G, C2, Dl, H B, C2, Dl, El, Fr G, H B, C2, Dl, El, F, G, H B, C2, Dl, E2, F, G, H B, C2, C3, Dl, D2, F, G, H B, Cl, C2, C3, Dl, D2, E2, F, G, H B, C2, Dl, El, F, G, H B, C2, C3, Dl, El, F, G, H S-46

218 S-46 TOWNSBP RANGE SECTON DESGNATED USE Perch* Rice Portage* Simian Sofie Spring Spruce Third Lake West Twin 48N 18W 6 B, c2, c3, 48~ 19w 1 Dl, El, E2, 49N 18W 29, 30, F, G, H 31 49N 19w 36 49N 19w 25, 26 B, C2, Dl, El, E2, F, G, H 50N 18W 32 B, Dl, El, F, G, H, C2 50N 17w 29 B, C2, C3, Dl, El, F, G, H 49N 18W 29, 32 B, c2, c3, Dl, F, G, H 48~ 19w 1 B, C2, Dl, El, F, G, H 49N 19w 27 B, C2, Dl, El, F, G, H 49N 17W 21 B, c2, c3, Dl, D2, F, 50N 1 18W 123, 26 ",;,";;."f;, Wild Rice* Second Lake STREAMS Annamhasung?lartin Branch 48N 18W 3 B, C2, 01, El, F, G, H 49N 17w 21 B, El, C2, 1 Dl, F, G 48~. 19w 2 B, C2,.Dl, 49N 19w 26, 21, F, H, G 34, 35 50N 18W 3, 4, 5, B, Cl, C3, 50N 19w 7, 8 12 Dl, E2, F, G, H 22

219 . Otter Creek Simian Creek jpring Creek?ond du Lac :reek jtoney Brook TOWNSEP 48~ 49N 49N 49N 49N 50N A 50N 49N 48N 49N 49N SON 50N 51N- 23 RANGE 17w 17w 18W 17w 18W 17w 18W 18W 17w 19w 18W 19w 18W 19w 18W SECTON 3 19, 20, 28, 29, 30, 32, 33, 34 25, , 2, 3, 10 20,21, 22,29, 30, ,2,3,11 12,14,15 22,23,24 25,26, , 4, 9, 16, 21 28, 31, 32, 33 14, 23, 24, 25 34, 36 34, 35 DESGNATED USE B, Cl, c3, Dl, E2, F, G, H B, C2, Dl, F, G, H 4, 5 B, c2, Dl, F, G, H 4, 9, B, Cl, Dl, 16,18, F, G, H 20, 21 1,2 B, Cl, C2, 6, 1, C3, Dl, F, 17, 18, G, H 19, 30 S-46

220 S-46 TOWNSHP RANGE SECTON DESGNA- USE St. Louis River 49N 50N 50N 51N 51N 17w 17w 18W 18W 19w 3,4, 10 7, 15, 16, 17, 18, 22, 26, 27, 33, 34 1, 2, 12 27, 28, 29, 30, 34, 35, 36 25, 26, 27 B, c2, c3, Dl, D2, E2, F, G, H * Potential Outstanding Reservation Resource Water Waters not listed above will have the following designated uses: B, C2*, Dl, F*, G*, H* (*if open water present). 24

221 Section 501 CHAPTER5 SAMPLNG AND ANALYSS Sample Collection. Preservation and Analysis S-46 Sample collection, preservation and analysis used to determine water quality and to maintain the standards set forth in the Water Quality Standards shall be performed in accordance with procedures prescribed by the latest editions of any of the following authorities a. Lake and Reservoir Bioassessment and Biocriteria. Technical Guidance Document, U.S. Environmental Protection Aaencv, Mav, 1995; b. Bioloaical Criteria. Technical Guidance for Streams and Small Rivers. Revised Edition, U.S. Environmental Protection Aaencv, Mav EPA 822-B ; c. Raoid Bioassessment Protocols for Use in Streams and River, Benthic Macroinvertebrates and Fish. U.S. Environmental Protection Aoencv. Mav, 1989, EPA/ /001; and d. EPA Guidelines Establishina Test Procedures for the Analvsis of Pollutants, Clean Water Act, 40 C.F.R

222 Section 601 C - 6 WATERQUALTY STANDARDSAND CRTERA Awlicabilitv f the maximum permissible levels of a substance as set forth in Appendix 1, Water Quality Standards Applicable to A, B, Cl, Dl and D2 Designated Waters are exceeded in any waters of the Fond du Lac Reservation, it shall be considered indicative of a polluted condition which is actually or potentially harmful, detrimental or injurious with respect to the designated uses and shall therefore be considered a violation of this Ordinance. The ambient water quality standards in Appendix 1 are standards for the protection of aquatic life, human health, and wildlife from the GL pollutants. The standards for a GL pollutant include the CS, MS, and FAV. Some pollutants do not have an MS or an FAV because of insufficient data. For these pollutants, Tier numeric criteria will be calculated according to GL methodology. The daily human consumption of fish caught by Fond du lac Band mambers is assumed to be kg/day. n addition to these standards, the standards contained in 40 C.F.R. Part 141, subparts B & G and Part 143 shall be applicable to the surface waters of the Reservation. Some of the GL pollutants listed in this Chapter have both aquatic life and human health standards and four of the GL pollutants have wildlife standards, as provided in tables 1 to 4 of the GL Guidance. The most stringent chronic aquatic life, human health, or wildlife standard listed is the applicable standard except when a less stringent chronic or maximum standard applies when setting an effluent limitation. For any aquatic life, human health, or wildlife chronic standard, a blank space in the following tables means no GL standard is available and the most stringent listed chronic standard is applicable. For the aquatic life MS and FAV, blank spaces mean the GL guidance lists no MS or FAV. Standards for metal are expressed as total metal but must be implemented as dissolved metal standards, using appropriate conversion factors. Standards for GL pollutants followed by (TH) or (ph) vary with total hardness or ph. The formulas for these standards are found in Appendix 2. Bacteriological standards can be found in Appendix S-46

223 S-46 CHAPTER7 STE-SPECFC WATER QUALTY STANDARDS OR CRTERA Section 701 Applicability This Section applies when a discharger requests a sitespecific criterion or a site-specific modification to a standard, or the Reservation Business Committee determines that a sitespecific criterion or modification is necessary to protect endangered or threatened species under Section 705, or highly exposed subpopulations under Section 707. Site-specific criteria or modifications to standards must be protective of designated use and aquatic life, wildlife and human health. Site-specific criteria or modifications must be preceded by a site-specific study of the effects of local environmental conditions on aquatic life, human health, or wildlife toxicity, and how these effects relate to the calculation of standards or bioaccumulation criteria. Aquatic life impact analysis must be conducted according to the EPA methods in Chapter 3 of the U.S. EPA Water Quality Standards Handbook, Second Edition (EPA-823-B a, August 1994), which is adopted and incorporated by reference. The Reservation Business Committee shall approve the site-specific study and, upon approval, the Reservation Business Committee shall use the study data to develop each site-specific criterion or standard, which then shall be submitted to EPA for approval. Section 702 Endanaered and Threatened Snecieq The Reservation Business Committee shall apply the provisions in items A to C when modifying a standard or developing a sitespecific criterion: a.any site-specific modifications that result in less stringent standards or site-specific criteria must not jeopardize the continued existence of endangered or threatened species listed or proposed under Chapter 6134 or Section 4 of the Endangered Species Act (ESA), 16 U.S.C , or result in the destruction or adverse modification of such species' critical habitat. b. More stringent modifications or site-specific criteria must be developed to protect endangered or threatened species listed or proposed under Chapter 6134 or Section 4 of the ESA where the water quality jeopardizes the continued existence of such species or results in the 27

224 S-46 destruction or adverse modification of such species' critical habitat. C. More stringent modifications or site-specific criteria must also be developed to protect candidate (Cl) species being considered by the U.F. Fish and Wildlife Service for listing under Section 4 of the ESA, where such modifications are necessary to protect such species. Section 703 Auuatic Life The Reservation Business Committee shall modify an aquatic life standard to a more stringent or less stringent site-specific standard, or determine a site-specific criterion, based upon the results of a site-specific study completed according to Section 701 if the study demonstrates that: a. The local water quality characteristics, such as ph, hardness, temperature, and color, alter the biological availability or toxicity of a pollutant; b. Local physical and hydrological conditions exist that alter the toxicity of a pollutant; or C. The sensitivity of the aquatic organisms that occur at that site differs from the species actually used in developing the standards or criteria. The taxa that occur at the site cannot be determined merely by sampling downstream and/or upstream of the site at one point in time. The phrase "occur at the site" does not include taxa that were once present at the site but cannot exist at the site now due to permanent physical alteration of the habitat a the site. t does include the species, genera, families, orders, classes, and phyla that: 1. Are usually present at the site; 2. Are present at the site only seasonally due to migration; 3. Are present intermittently because they periodically return to or extend their ranges into the site; 4. Were present. at the site in the past, are not currently present at the site due to degraded conditions, and are expected to return to the site when conditions improve; or 5. Are present in nearby bodies of water, are not currently present at the site due to degraded conditions, and are expected to be present at the site when conditions improve. f items A, B or C indicates that the pollutant is more toxic at the site or organisms are more sensitive, or if additional 28

225 S-46 protection is necessary to maintain designated aquatic life uses, the Reservation Business Committee shall calculate a more stringent site-specific standard or criterion. f item A, B or C indicates that the GL pollutant is less toxic at the site or organisms are less sensitive than those used in the calculation of the standard or criterion, and neither item A, B nor C indicate greater toxicity, the Reservation Business Committee shall calculate a less stringent site-specific standard or criterion. Section 704 Wildlife The Reservation Business Committee shall modify a wildlife standard to a more stringent or less stringent site-specific standard, or determine a site-specific criterion, based upon the results of a site-specific study completed according to Section 701. More stringent site-specific water quality standards or criteria shall be developed when a site-specific bioaccumulation factor is derived which is higher than the systemwide BAF. Less stringent site-specific water quality standards or criteria shall be developed when a site-specific BAF is derived which is lower than the systemwide RAF. The Reservation Business Committee's modification evaluation shall evaluate both the mobility of the prey organisms and wildlife populations in defining the site for which the criteria or modified standards are developed. n addition, for less stringent site-specific water quality standards or criteria to be applied in a permit there must be a demonstration by either the discharger or the Reservation Business Committee that: a. Any increased uptake of the toxicant by prey species utilizing the site will not cause adverse effects in wildlife populations; and b. Wildlife populations utilizing the site or downstream surface waters of the state will continue to be fully protected. Section 705 Site-SPecific Modifications to Protect Threatened or Endsnaered SPecies The Reservation Business Committee shall modify both aquatic life and wildlife standards or develop criteria on a site-specific basis to protect threatened or endangered species where the water quality jeopardizes the continued existence of such species or results in the destruction or adverse modification of such species' critical habitat. The provisions in items A and B apply to site- 29

226 S-46 specific standards or criteria to protect endangered or threatened species: a. Site-SpeCifiCmodifications to aquatic life standards, or site-specific criteria, shall be calculated by the Reservation Business Committee when one of the following methods is applicable: 1. f the species mean acute value for a listed or proposed species, or an applicable surrogate of such species, is lower than the calculated FAV, the lower species mean acute value must be used instead of the calculated FAV in developing the site-specific criterion or standard. 2. The site-specific criterion or standard must be calculated using the recalculation procedure for site-specific modifications when the sensitivities of organisms used to derive the GL pollutant standard or criterion are different from the sensitivities of the organisms that occur at the site. The recalculation procedure is described in Chapter 3 of the U.S. EPA Water Quality Standards Handbook, Second Edition (EPA-823-B a), August 19941, which is adopted and incorporated by reference. 3. f the methods in items (1) and (2) are both applicable, the Reservation Business Committee shall follow both methods to calculate sitespecific modifications to aquatic life standards or site-specific criteria, then compare the results and apply the more stringent standards or criteria. b. For any modifications to wildlife standards or criteria, the Reservation Business Committee shall evaluate both the mobility of prey organisms and wildlife populations in defining the site for which standards or criteria are developed and must use the following method to calculate site-specific standards criteria: Substitute appropriate species-specific toxicological, epidemiological or exposure information including changes to the BAF used in the GL Guidance methodology; Use an interspecies uncertainty factor of 1 where epidemiological data are available for the species in question. f applicable, species-specific exposure parameters must be derived using the GL Guidance methodology; 30

227 , 3. Apply an intraspecies sensitivity factor to the denominator in the effect part of the wildlife equation in the GL Guidance methodology in accordance with the other uncertainty factors described in the method; and 4. Compare the resulting wildlife criterion or standard for the species in question to the class-specific avian and mammalian wildlife values previously calculated 40 C.F.R. Part Part 132, Appendix A, entitled "Great Lakes Water Quality nitiative Methodologies for Development of Aquatic Life Criteria and Values," as amended through March 12, 1997 and apply the lowest of the three as the site: specific standard or criterion. Section 106 Bioaccumulation Fac,tors The Reservation Business Committee shall modify the BAFs on a site-specific basis to larger values if data from the site-specific study show that a bioaccumulation value derived from local bioaccumulation data is greater than the systemwide value. Sitespecific BAFs must be derived using the GL Guidance methodology. The Reservation Business Committee shall modify BAFs on a sitespecific basis to lower values if: a. The fraction of the total chemical freely dissolved in the ambient water is less than that used to derive the systemwide BAFs; b. nput parameters of the Gobas model, such as the input structure of the aquatic food web and the disequilibrium constant, are different at the site than those used to derive the systemwide BAFs; C. The percent lipid of the aquatic organisms that are consumed and occur at the site is lower than that used to derive the systemwide BAFs; or d. Site-specific, field measured BAFs or biota-sediment accumulation factors are determined. Section 707 Human Heal* The Reservation Business Committee shall modify human health standards or determine criteria on a site-specific basis to provide additional protection necessary for highly exposed subpopulations. A subpopulation is highly exposed if the dosage of the GL pollutant is greater for the subpopulation due to increased fish consumption rates, increased water ingestion rates, or an increased 31 S-46

228 BAF. The Reservation Business Committee shall develop less stringent site-specific human health standards or criteria if the study approved under Section 701 demonstrates that: a. Local fish consumption rates are lower than the rate used in deriving human health standards or criteria using the methodology provided by 40 C.F.R. Part 132, Appendix C, entitled "Great Lakes Water Quality nitiative Methodology for Development of Human Health Criteria and Values," as amended through March 12, 1997; or b. A site-specific BAF is derived under Section 706 which is lower than that used in deriving human health standards or criteria using the methodology provided by 40 C.F.R. Part 132, Appendix C, entitled "Great Lakes Water Quality nitiative Methodology for Development of Human Health Criteria and Values," as amended through March 12, S-46

229 S-46 CHAPTER8 MXNG ZONES AND VARANCES Section 801 Applicability For acute and chronic mixing zones, to C shall apply: the conditions in items A a. At the edge of an acute mixing zone approved under Section 802, acute aquatic life toxicity must not exceed the maximum standard or criterion, or 0.3 TUa for WET. f the discharger does not have an approved acute mixing zone demonstration, the Reservation Business Committee shall apply the FAV, or 1.0 TUa for WET, directly to the discharge. f acute mixing zones from two or more proximate sources interact or overlap, the combined effect must be evaluated to ensure that applicable standards and criteria will be met in the area of overlap. b. At the edge of a chronic mixing zone, chronic toxicity must not exceed the chronic standard or criterion, or 1.0 TUc for WET. A chronic mixing zone must equal: 1. Not more than 25 percent of the applicable stream design flows using dynamic models found in Chapter 4 of the EPA Technical Support Document for Water Quality Based Toxics Control (EPA , March,l991), unless an alternate chronic mixinq zone demonstration is approved under Section-802; or 2. For lakes, the area of 1O:l dilution of receiving water volume to effluent volume, unless a chronic mixing zone demonstration approved under Section 802 identifies an alternate dilution ratio in which case the chronic mixing zone must equal the area corresponding to the alternate dilution ratio. The mixing zone in lakes must not exceed the area of discharge-inducing mixing. C. Acute and chronic mixing zones must not jeopardize the continued existence of endangered or threatened specific. P..~ listed or proposed under Chapter 6134 or Section 4 or me Endangered Species Act, 16 U.S.C. 1533, or result in the destruction or adverse modification of such species' critical habitat. 33

230 Section 802 Demonstration Recruirements The Reservation Business Committee shall approve an acute or chronic mixing zone demonstration if the discharger proposing a mixing zone completes a demonstration that complies with items A to N: a. b. C. d. e. f. g* h. 1. j. k. 1. Define the mixing zone size, shape, location of the area of mixing, manner of diffusion and dispersion, and amount of dilution at the boundaries; Determine the discharge-induced mixing area for lake discharges; For discharge. to a lake, determine the dilution ratio of receiving water volume to effluent volume. f this dilution ratio is other than 10 to 1 and results in a mixing zone that is no greater than the area of discharge-induced mixing, the calculated ratio must be used in the WLA calculation for lakes; Document the substrate character and geomorphology of the mixing zone; Ensure that the mixing zone will maintain a zone of passage for mobile aquatic life, protect spawning, nursery areas, and migratory routes, and not intersect river mouths; Ensure the mixing zone will protect the existence of threatened or endangered species; Document that the mixing zone does not affect drinking water intakes; Document background water quality concentrations; Show the mixing zone does not promote undesirable aquatic life or dominance of nuisance species; Ensure that the mixing zone will not result in the following: 1.. Objectionable deposits formed by settling; 2. Floating debris, oil or scum; 3. Objectionable taste, odor, color or turbidity; 4. or Attraction of organisms to the area of discharge. Prevent or minimize overlapping mixing zones; Document the ability of the habitat to support endemic or naturally occurring species; 34 S-46

231 S-46 m. Assume no GL pollutant degradation unless both of the following conditions are met: 1. field studies or other information demonstrate that degradation of the GL pollutant is expected to occur under the full range of environmental conditions expected to be encountered; and 2. field studies or other information address other factors that affect the level of GL pollutants in the water column including sediment resuspension, chemical separation, and biological and chemical transformation. n. Show that the mixing zone will not interfere with the designated or existing uses of the receiving water or downstream surface waters. Section 803 BCC Mixina Zones After the effective date of this Ordinance, acute and chronic mixing zones shall not be allowed for new and expanded discharges of BCCs to Reservation waters. Acute and chronic mixing zones for existing discharges of BCCs must be phased out by March 23, 2007, except under the provisions of items A to E. After the effective date of this Chapter for new and expanded discharges and March 23, 2007, for existing discharges, WLAs developed under Sections 801 and 802 for discharges of BCCs must be set equal to the most stringent applicable water quality standard or site-specific criterion for the BCC in question. The provisions for exceptions to the acute and chronic mixing zone phase-out for existing discharges of BCCs are in items A to E: a. Mixing zones for BCCs shall be allowed for existing discharges after March 23, 2007, if the discharger demonstrates that the failure to maintain an existing mixing zone would preclude water conservation measures that would lead to overall load reductions in BCCs discharges; b. Mixing zones shall be allowed for existing discharges after March 23, 2007, upon the request of the discharger if the Reservation Business Committee determines that: 1. The discharger is in compliance with and will continue to implement technology-based treatment and pretreatment requirements under Sections 301, 302, 304, 306, 307, 401 and 402 of the Clean Water Act, 33 U-S-C. 1311, 1312, 1314, 1316, 1317, 1341, and 1342, and is in compliance with its existing permit WQBBLS, including those based on a mixing zone; and 35

232 S The discharger has reduced and will continue to reduce the loading of the BCC for which a mixing zone is requested to the maximum extent possible by the use of cost-effective controls or pollution prevention alternatives that have been adequately demonstrated and are reasonably available to the discharger. C. n making the determination in item B, the Reservation Business Committee must consider: The availability and feasibility, including cost effectiveness, of additional controls or pollution prevention measures for reducing and ultimately eliminating BCCs for that discharge, including those used by similar discharges; Whether the discharger of affected communities will incur unreasonable economic effects if the mixing zone is eliminated; and The extent to which the discharger will implement an ambient monitoring plan to ensure compliance with water quality standards and criteria at the edge of any authorized mixing zone or to ensure consistency with any applicable TMDL or assessment and remediation plan. d. Any exceptions to the mixing zone phase-out provision for existing discharges of BCCs granted under this Section must: Not result in any less stringent effluent limitations than those existing on the effective date of this Ordinance in the previous permit; Not jeopardize the continued existence of any endangered or threatened species listed under Chapter 6134 or Section 4 of the Endangered Species Act, 16 U.S.C , or result in the destruction or adverse modification of such species' critical habitat; Be limited to one permit term unless the Reservation Business Committee makes a new determination in accordance with this Section for each successive permit. application in which a mixing zone for the BCCs is sought; Reflect all information pertaining to the size of the mixing zone considered by the 36

233 S-46 Reservation Business Committee under Section 2; 5. Protect all designated and existing uses of the receiving water; 6. Meet all applicable aquatic life, wildlife, and human health standards and criteria at the edge of the mixing zone for a WLA in the absence of a TMDL, or, if a TMDL has been established, be consistent with any TMDL or such other strategy consistent with this Ordinance; 7. Ensure the discharger has developed and conducted a GL pollutant minimization program for BCCs if required to do so. 8. Ensure that alternative means for reducing BCCs elsewhere in the watershed are evaluated. e. For each draft permit that would allow a mixing zone for one or more BCCs after March 23, 2007, the fact sheet or statement of basis for the draft permit, required to be made available through public notice must: Section Specify the mixing provisions used in calculating the effluent limitations; 2. dentify each BCC for which a mixing zone is proposed. Variancea This part applies to pollutant specific variance requests from individual point source dischargers to surface waters for WQBELS which are included in a permit. This part does not apply to new dischargers, unless the proposed discharge is necessary to alleviate an imminent and substantial danger to public health and welfare. A water quality standards or criteria variance shall not be granted if any of the following conditions exist: a. f it would jeopardize the continued existence of any endangered or threatened species listed under Chapter 6134 or Section 4 of the Endangered Species Act, 16 U.S.C , or result in destruction or adverse modification of such species' critical habitat; or 13. f standards or criteria will be attained by implementing effluent limitations required under Sections 301(b) and 306 of the Clean Water Act, 33 USC 1311(b) and 1316, and by the permittee implementing cost-effective and 31

234 Section 805 S-46 reasonable bestmanagementpractices for non-point source control. Maximum Time Framq A variance shall not exceed five years or the term of the permit, whichever is less. Section 806 Conditions to Grant Noting that all variances and site-specific criteria require approval by USEPA, the Reservation Business Committee shall grant a variance if the following conditions are met: a. The permittee demonstrates to the Reservation Business Committee that attaining the water quality standards or criterion is not feasible because: Naturally occurring pollutant concentrations prevent attainment of the water quality standard or criterion; Natural, ephemeral, intermittent, or low-flow conditions or water levels prevent the attainment of water quality standards or criteria, unless these conditions may be compensated for by discharging sufficient volume of effluent to enable water quality standards or criteria to be met without violating water conservation requirements; Human-caused conditions or sources of pollution prevent the attainment of water quality standards or criteria and cannot be remedied, or would cause more environmental damage to correct than to leave in place; Dams, diversions, or other types of hydrologic modifications preclude the attainment of water quality standards or criteria, and it is not feasible to restore the waterbody to its original condition or to operate the modification in a way that would result in attainment of the water quality standard; Physical conditions related to the natural features of the waterbody, such as the lack of a proper substrate cover, flow, depth, pools, riffles and the like, unrelated to chemical water quality, preclude attainment of water quality standards or criteria: or 38

235 6. Controls more stringent than those required under Sections 301(b) and 306 of the Clean Water Act, 33 U.S.C. 1311(b) and 1316, would result in substantial and widespread economic and social impact; b. The permittee shows that the variance conforms with Reservation Business Committee antidegradation procedures; and c. The permittee characterizes the extent of any increased risk to human health and the environment associated with granting the variance, such that the Reservation Business Committee is able to conclude that any increased risk is consistent with the protection of the public health, safety and welfare. Section 807 ADDlication and Public Notice Preliminary determinations regarding variance application submittals shall be preceded by a public notice in a local newspaper and a minimum of forty-five consecutive day comment period. The Reservation Business Committee shall also notify other Great Lakes Tribes and states regarding such preliminary determinations. During the comment period, any Band member or other interested persons may request a public hearing prior to adoption of such changes or revisions by the Reservation Business Committee. Upon a public hearing request, the Reservation Business Committee shall by public notice in a local newspaper announce the date, time and location of such public hearing and said public notice shall be published at least forty-five consecutive days prior to the public hearing. The Reservation Business Committee shall send a notice of the public hearing to all identified interested and affected persons and parties at least forty-five consecutive days prior to the public hearing. Any reports, documents and data relevant to the discussion at the public hearing shall be available at least thirty days before the hearing. Section 808 Final Decision The Reservation Business Committee shall issue a final decision regarding variance applications submittals within 90 days of the public comment period. f a variance is granted, the appropriate permitting authority shall include and incorporate into the permit the following conditions: a. An effluent limitation representing currently achievable treatment conditions based on discharge monitoring which is no less stringent than that achieved under the previous permit; 39 S-46

236 b. A schedule of compliance activities which indicates reasonable progress will be made toward attaining water quality standards or criteria; c. An effluent limitation sufficient to meet the underlying water quality standards or criterion, upon the expiration of the variance, when the duration of the variance is shorter than the duration of the permit; d. A provision allowing the appropriate permitting authority either independently or at the request of the Reservation Business Committee to reopen and modify the permit based on the Reservation Business Committee triennial water quality standards revisions applicable to the variance: and e. For BCCs, a GL pollutant minimization program. Section 809 Renewal of Variance The renewal of a variance is subject to the requirements of Sections 801 to 805. Section 810 Notice of Variancea The Reservation Business Committee shall list all variances to these standards in a public notice. 40 S-46

237 Section 901 CHAPTER 9 ENFORCEMENT 6 PROSECUTON Enforcement The Environmental Protection Office of the Fond du Lac Band shall be responsible for the identification of violations of this Ordinance, and enforcement of the provisions of this Ordinance shall be achieved through the issuance of a summons and complaint through the Fond du Lac Division of Resource Management. Section 902 Prosecution Prosecution for violations of this Ordinance shall be brought in Fond du Lac Tribal Court by the prosecutor of the Fond du Lac Band pursuant to the provisions of this Ordinance and the Fond du Lac Civil Code, FDL Ord. #04/92, as amended. Section 903 Remedieq S-46 a. Civil nenalties. Violation of any provision of this Ordinance may be punished or remedied by a civil penalty not to exceed $500. Each day of any continuing violation may be charged as separate violation, and a separate penalty may be imposed. b. Seizure and Forfeiturg. n addition to civil penalty, any personal property which has been used in connection with a violation of this Ordinance, including vehicles and other equipment, may be seized and forfeited in satisfaction of any judgment entered pursuant to this Ordinance, pursuant to the Fond du Lac Civil Code. C. Moneterv Damaaes and niunctive Relief. n addition to civil penalty, seizure and forfeiture, the Reservation Business Committee may seek, and the Fond du Lac Tribal Court may grant, money damages or injunctive relief against any violator of this Ordinance to compensate for damages to, or to prevent imminent harm against, any Band resource caused by the violation.

238 S-46 CHAPTER10 AMENDMENTS AND SEVERABLTY Section 1001 Amendraents The provisions of this Ordinance may be amended by separate ordinance and resolution of the Reservation Business Committee. Section 1002 Severabilitv f any section, provision, or portion of this Ordinance is adjudged unconstitutional or invalid by a court of competent jurisdiction, the remainder of this Ordinance will not be affected thereby. CERTFCATON We do hereby certify that.he foregoing Ordinance was duly presented and adopted by Resolution #1403/98, by a vote of 4 for, Q against, Q silent, with a quorum of 2 being present at a Special Meeting of the Fond du Lac Reservation Business Committee held on December 10, 1998 on the Fond du Lac Reservation, and subsequently amended by Resolution #1286/01, on September 11, ChXSA Robert B. Peacock, Chairman APPROVED AS TO FORM: 42

239 Appendixl. Standards Specific to Designated Use S-46 Water Quality Standards Applicable to A, Waters SUbStanCe Units Aquatic Aquatic Life Life Chronic Maximum Standard Standard B, Cl, Dl and D2 Designated Use Wildlife Chronic Standard - Applical S Chronic StandarC csenic, total Kxlzene 'admium, total TH) hlordane hlorobenzene hromium, ota1 (TX1 ug/l q/1 ug/l.p4/1 148 APP APP ug/l ug/1 APP. 2 App. 2 nnn..=r. 2 APP APP. 2 hromium V, total q/l opper, total (TH) ug/l APP. 2 APP. 2 APP. 2 yanides* ug/l DT P9/1 18 ieldrin P4/ ,4-Dimethylphenol ug/ ,4-Dinitrophenol ug/l ndrin US/l exachlorobenzene pg/l T exachloroethane W/l 0.75 indane ug/ UC"ly* ug/ ethylene Chloride US/l 45 ickel, total (TH) ug/l APP. 2 APP. 2 APP. 2 arathion ug/l CBS class) DS/l 3.2 entachlorophenol ug/l App. 2' APP. 2 APP PH elenium, total w/l ,3,7,8-TCDD pg/l Ele us/l APP APP T he.%? do not reflect $ lipid adjustment 43 APP. 2

240 S-46 Water Quality Waters Standards Applicable to A, B, C2, Dl and D2 substance Aquatic Units Aquatic Aquatic Life Life Maximum Final Standard Acute L i f e Chronic Standard * These do not reflect % lipid adjustment i u m a n Health Chronic Standard

241 S-46 Water Quality.rsenic, total enzene Standards Applicable to B, C2, 123, Dl and D2 Designated use

242 Appendix 2. Standarfs that vary with Total Hardness (TH) or ph a. Designated use A, B, Cl, C2, C3, Dl and D2 standards that vary with total hardness (TB) applicable to all surface waters of the Reservation, are listed in this subsection. Total hardness is the sum of the calcium and magnesium concentrations expressed as calcium carbonate in mg/l. 400 mg/l, 400 mg/l must be used in the calculation of the standard. e exponential function. formula. results in us/l exp.lo.7852 r1n (TH mg/l)l-2.715) exp.( n (TH mg,l~l ) e~p rln m mg,l)l ) formula, results in S/l exp. ~0.819/1n (TX mg/1) ) exp. l0.819[ln TH mg/1) ) exp. (0.819[ln ith m9/1) ) exp. (0.8545ln (TH mg/l)-1.702) exp. l0.9422[1l TH mg/l)l-1.700) exp. (0.9422[1n (TH mg/l)l ) fannula, results in us/l exp. ( n TH mg/l)l+o.o584) exp [1n TH mg/1) ) exp. ( n (TH mg/1) ) Eonnula, results in uq,l exp. i n(th q/1) ) exp. l0.8473[lrl(th mg/ ) exp. (O.B473ml(TH mg/1) ) For ambient or effluent total hardness values greater than Exp. is the base Example Standards at hardness of: so m Example standards at hardness of: so E Example standards at hardness of: so a m Exa"Ple Standards at hardness of: so gg & b. Designated we An BV Cl, C2, C3, Dl and D2 standards that vary with ph are listed in this subsection. Exp. is the base e exponential function. P~K~&ll0~0- M formula, results in uq/l Example standards at PH of: 6.5 Q 7.5 g& s.5 cs exp. (l.o05[ph]-5.134) not to exceed 5.5 ug,l MS exp. ll.o05[phl-4.869) FAV exp. (1.005[pHl-4.175) S-46 46

243 c. Conversion factors for transforming total metals to dissolved metals. Metal Conversion Factors Acute Chronic Arsenic S-46 41