3EZ
United States
Environmental Protection
Agency
Office Of Air Quality
Planning And Standards
Research Triangle Park, NC 27711
EPA-452/R-01-007
May 2001
Air
Economic Impact Analysis for the Proposed
Clay Minerals Processing NESHAP
U.S. Environmental Protection
Region 5, Library (PL-12J)
77 West Jackson Boulevard, 12th f tew
Chicago, IL 60604-3590
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This report has been reviewed by the Emission Standards Division of the Office of Air Quality
Planning and Standards of the United States Environmental Protection Agency and approved for
publication. Mention of trade names or commercial products is not intended to constitute endorsement or
recommendation for use. Copies of this report are available through the Library Services (MD-35), U.S.
Environmental Protection Agency, Research Triangle Park, NC 27711, or from the National Technical
Information Services 5285 Port Royal Road, Springfield, VA 22161.
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ACRONYMS
CAA
EIA
EPA
HAPs
HC1
HF
ISEG
MACT
NESHAP
NAICS
OAQPS
RFA
SBREFA
SIC
VOS
Clean Air Act
Economic Impact Analysis
United States Environmental Protection Agency
Hazardous Air Pollutants
Hydrogen Chloride (also known as Hydrochloric Acid)
Hydrogen Fluoride
Innovative Strategies and Economics Group
Maximum Achievable Control Technology
National Emission Standards for Hazardous Air Pollutants
North American Industrial Classification Code
Office of Air Quality, Planning, and Standards
Regulatory Flexibility Act
Small Business Regulatory Enforcement Fairness Act
Standard Industrial Classification
Value of Shipments
11
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CONTENTS
Section Page
1 INTRODUCTION 1-1
1.1 Scope and Purpose 1-1
1.2 Organization of the Report 2-1
2 INDUSTRY PROFILE 2-1
2.1 Production Overview 2-2
2.1.1 Stages of Production 2-3
2.1.1.1 Ball Clay Processing 2-5
2.1.1.2 Common Clay and Shale Processing 2-5
2.1.1.3 Fuller's Earth Processing 2-5
2.1.1.4 Kaolin Processing 2-9
2.1.1.5 Fire Clay Processing 2-9
2.1.1.6 Bentonite Processing 2-11
2.1.2 Emissions from the Processing of Clay Minerals 2-11
2.1.3 Costs of Production 2-11
2.2 Uses, Consumers, and Substitutes 2-15
2.2.1 End Uses of Clay Minerals 2-16
2.2.2 Consumers of Clay Minerals 2-23
2.2.2 Substitutes for Clay Minerals 2-24
2.3 Industry Organization 2-26
2.3.1 Market Structure 2-26
2.3.2 Clay Minerals Processing Facilities 2-28
2.3.3 Companies 2-29
2.3.4 Market Data and Trends 2-31
3 ENGINEERING COST ANALYSIS 3-1
3.1 Regulatory Costs Description 3-1
3.2 Affected Facilities 3-2
4 ECONOMIC IMPACT ANALYSIS 4-1
5 SMALL BUSINESS ANALYSIS 5-1
6 REFERENCES 6-1
Appendix A Summary Clay Minerals Processing Company Data A-l
iii
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LIST OF FIGURES
Number Page
2-1 Clay Minerals Processing Flow Diagram 2-4
2-2 Ball Clay Processing Flow Diagram 2-6
2-3 Common Clay and Shale Processing Flow Diagram 2-7
2-4 Fuller's Earth Processing Flow Diagram 2-8
2-5 Kaolin Processing Flow Diagram 2-10
2-6 Fire Clay Processing Flow Diagram 2-12
2-7 Bentonite Processing Flow Diagram 2-13
2-8 Distribution of Ball Clay by End Use: 1996 2-18
2-9 Distribution of Common Clay and Shale by End Use: 1996 2-19
2-10 Distribution of Fuller's Earth by End Use: 1996 2-20
2-11 Distribution of Kaolin by End Use: 1996 2-21
2-12 Distribution of Fire Clay by End Use: 1996 2-22
2-13 Distribution of Bentonite by End Use: 1996 2-23
IV
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LIST OF TABLES
Number Page
2-1 1997 Production Costs for the Clay Minerals Processing Industries 2-14
2-2 1997 Costs as Shares of the Value of Shipments (VOS) for the Clay
Minerals Processing Industries 2-15
2-3 Domestic Quantities, Shares, and Prices of Processed Clay Minerals
in 1996 2-17
2-4 Measures of Market Concentration for the Clay Minerals Mining
and Processing Industry 2-27
2-5 Number of Facilities That Process the Different Types of Clay
Minerals 2-28
2-6 Location of Potentially Affected Facilities by State 2-30
2-7 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Domestically Processing Clay Minerals ($103):
1993 - 1997 2-32
2-8 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Ball Clay ($103): 1993 - 1997 2-33
2-9 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Common Clay and Shale ($103): 1993-1997 2-34
2-10 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Fuller's Earth ($103): 1993 - 1997 2-35
2-11 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Kaolin ($103): 1993 - 1997 2-36
2-12 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Fire Clay ($103): 1993 - 1997 2-37
2-13 Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Bentonite ($103): 1993 - 1997 2-38
2-14 Historical Data on the Price per Metric Ton of Clay Minerals:
1993 -1997 2-39
3-1 Monitoring, Recordkeeping, and Recording Costs for Clay Minerals
Processing Facilities 4-1
4-1 Company Compliance Costs, Annual Sales, and Cost-to-Sales
Ratios: 2000 4-2
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ECONOMIC IMPACT ANALYSIS:
CLAY MINERALS PROCESSING
1 INTRODUCTION
Pursuant to Section 112 of the Clean Air Act, the U.S. Environmental Protection
Agency (EPA or the Agency) is developing National Emissions Standards for Hazardous Air
Pollutants (NESHAP) to control emissions released from the domestic processing of clay
minerals. Clay minerals processing entails the mining and preparation of clay material for
use as an input to a variety of end products. The processing of clay results in emissions of
hazardous air pollutants (HAPs). The NESHAP which this economic impact analysis (EIA)
addresses is scheduled to be proposed in mid-2001. The Innovative Strategies and
Economics Group (ISEG) of the Office of Air Quality Planning and Standards (OAQPS)-has
developed this analysis in support of the evaluation of impacts associated with the clay
minerals processing NESHAP.
1.1 Scope and Purpose
This report evaluates the economic impacts of pollution control requirements on clay
minerals processing operations. The Clean Air Act (CAA) was designed to protect and
enhance the nation's air resources and Section 112 of the CAA establishes the authority to
control HAP emissions. A large percentage of the HAP compounds released from clay
minerals processing operations are hydrogen fluoride (HF) and hydrogen chloride (HC1). To
reduce emissions of these and other HAPs, the Agency establishes maximum achievable
control technology (MACT) standards. The term "MACT floor" refers to the minimum
control technology on which MACT standards can be based. The MACT floor is set by the
average emissions limitation achieved by the best performing 12 percent of sources in a
category or subcategory when that category or subcategory contains at least 30 sources. The
estimated costs for individual clay minerals processing facilities to comply with these
standards are inputs to the economic impact analysis presented in this report.
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1.2 Organization of the Report
The economic impact analysis is organized into four sections. Section 2 provides a
profile of the industry which includes a description of the producers and consumers of clay
minerals. This section also presents available market data and trends in the industry,
including domestic production, foreign trade, and apparent U.S. consumption. Section 3
describes the facility-level costs of complying with this NESHAP and Section 4 provides
facility-, market-, and society-level impacts of complying with this rule. Small business
considerations are made in Section 5 as required by the Regulatory Flexibility Act (RFA) of
1980 which was modified by the Small Business Regulatory Enforcement Fairness Act
(SBREFA)ofl996.
2 INDUSTRY PROFILE
The industry profile is organized as follows: Section 2.1 describes the stages and costs
of clay minerals processing, as well as the types of emissions released during each of the
processing stages. Section 2.2 explains the various uses and -consumers of clay minerals, as
well as the substitutable inputs for clay minerals. Section 2.3 provides a summary profile of
the clay minerals processing industry, including a description of the manufacturing facilities
and the companies that own them.
Clay minerals are common inputs to a variety of products such as pottery, bricks,
sanitaryware, dinnerware, tiles, structural products, lightweight aggregate, and other materials
used in construction. They can also be used as fillers and extenders in cosmetics, fertilizers,
pet litter, and animal feed. Clay refers to fine-grained materials from the earth that have a
plastic-like composition when wet. The pliable nature of wet clay allows it to be molded and
shaped. Clay will harden and retain its shape when it is dried through heat exposure. If the
clay material is glazed before it is dried, it becomes fireproof and waterproof. These
characteristics make clay an attractive input to the production of the products listed above.
Six major clay categories exist: ball clay, common clay and shale, fuller's earth,
kaolin, fire clay, and bentonite. The various types of clays are used in the production of
different final goods, however, there is some substitutability between them as inputs. Ball
clay, a plastic sedimentary clay, is primarily used in tile and sanitaryware production.
Common clay has a relatively high iron content and turns red when fired, while shale is a
fine-grained sedimentary rock with a thin, friable structure. These two are used in the
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production of brick, cement, and lightweight aggregate. Fuller's earth, an absorbent clay
mineral that lacks plasticity, is a common input to absorbent materials such as pet litter.
Kaolin is a pure white clay used mainly in the paper industry. Fire clay is able to withstand
extremely high temperatures and therefore is used primarily in refractories. Last is bentonite,
which is formed from volcanic ash and is an absorbent aluminum silicate clay. It, like
fuller's earth, is used in the production of absorbent materials and foundry sand.
The mining and processing of these clay minerals fall under a few different industries.
The Standard Industrial Classification (SIC) codes of these industries are:
SIC 1455 - Kaolin and Ball Clay;
• SIC 1459 - Clay, Ceramic, and Refractory Minerals, not elsewhere classified
(n.e.c.); and
SIC 3295 - Minerals and Earths, Ground or Otherwise Treated.
These correspond to the following North American Industrial Classification System (NAICS)
codes:
NAICS 212324 - Kaolin and Ball Clay Mining;
• NAICS 212325 - Clay, Ceramic, and Refractory Minerals Mining; and
NAICS 327992 - Ground or Treated Mineral Earth Manufacturing.
Processing the six different categories of clay minerals entails similar steps. The
primary HAPs emitted during the processing of clay minerals are hydrogen fluoride (HF) and
hydrogen chloride (HC1) and the major source of these emissions is the calciners used during
the treatment stage of processing. Other HAP emissions are a function of the clay minerals
and the additives used during their processing.
2.1 Production Overview
This section provides a description of clay minerals processing. Section 2.1.1
describes the stages involved in the processing of clay minerals, while Section 2.1.2 briefly
discusses the emissions released from these operations. Section 2.1.3 addresses the costs
associated with clay minerals processing and last, Section 2.1.4 provides average market
values of the six categories of clay minerals.
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2.1.1 Stages of Production
The production processes of clay minerals differ across the six clay categories,
however, they are similar enough that a general description can be provided. After the
description of the general processing procedure of clay minerals, the specific processes used
for each clay type are explained in more detail. Information in this section was taken from
EPA's Emission Factor Documentation on Clay Processing (1995).
As Figure 2-1 shows, there are several steps involved in the mining and processing of
clay minerals that can then be used as inputs. In general, clay minerals are:
extracted by open-pit methods or mined from underground;
• reduced in size through crushing, grinding, and screening;
• treated mechanically and chemically; and
• packaged for shipping and/or storage.
Clay minerals are first extracted from the ground using various types of equipment,
such as power shovels, front-end loaders, backhoes, and shale planers. Some kaolin is also
extracted through hydraulic mining and dredging. Most clay minerals are mined by open-pit
methods, however a high percentage of fire clay is mined underground relative to other clays.
Higher quality fire clay is found deep underground, thus making open-pit mining for this clay
type less common. Once the clays are mined, they are transported to plants for processing.
Processing begins with the crushing, grinding, and screening of the clay minerals.
Depending on the how the clay minerals are going to be used in production, they may go
through up to three crushing stages during processing. The primary crushing and grinding
reduces the size of the clay minerals from up to one meter down to a few centimeters in
diameter using jaw or gyratory crushers. Secondary crushing is accomplished through the use
of rotating pan crushers, cone crushers, smooth roll crushers, toothed roll crushers, and
hammer mills. In this stage, the size of the clay material is reduced to 3 millimeters or less in
diameter. Clays may even be required to go through a third crushing and grinding stage, in
which ball, rod, or pebble mills are used. After the crushing of the clay minerals, they are
passed through screens to determine if they have been satisfactorily reduced in size. Screens
are set up in a sloping, multi-deck fashion and are mechanically or electromagnetically
vibrated as the clay minerals pass through. If they do not pass through, they are crushed
further until they are able to pass through the screens.
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Mining
Primary Crushing
and Grinding
Secondary Crushing and
Grinding (optional)
Tertiary Crushing and
Grinding (optional)
T
Screening
Mechanical and
Chemical Processing
Packaging and Storage
Figure 2-1. Clay Minerals Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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Crushing, grinding, and screening operations do not significantly alter the chemical
and mineralogical properties of clay minerals, but since they are used in a variety of
applications, they must be mechanically and chemically treated. The processes, which
prepare the clay minerals for use as inputs, include blunging, extrusion, drying, and calcining.
Blunging is a process by which the clay material is mixed with water in a pug mill. The clay
may next be extruded through dies and then dried using rotary, fluid bed, and vibrating grate
dryers. Certain clays require calcining, which is accomplished with rotary or flash calciners.
2.1.1.1 Ball Clay Processing
Figure 2-2 shows a flow diagram of the processing steps of ball clay. Ball clay has a
moisture content of approximately 28 percent, so after it is mined, it is stored in sheds to dry.
When the moisture content decreases to about 22 percent, it is then ready to be processed.
Ball clay is shredded into pieces 1.3 to 2.5 centimeters thick using a disintegrator instead of
being crushed and screened. This material is either ground using a hammermill or dried in
rotary or vibrating dryers. If the ball clay is ground, it is next mixed with water and is ready
for shipping in the form of a slurry. Otherwise, the ball clay is dried until it reaches a
moisture content of 8 to 10 percent. This dried clay is then ground in a roller mill and is
ready for shipping. This ground ball clay can also be mixed with water and shipped in the
form of a slurry as well.
2.1.1.2 Common Clay and Shale Processing
As shown in Figure 2-3, the processing of common clay and shale follows the
processing steps of clay minerals in general. The mined common clay and shale is first
crushed and screened. If material is oversized, it is returned to the crushers until the material
is small enough to pass through the screens. At this stage the common clay and shale may be
dried to reduce its moisture content for some applications or it may require blunging,
extrusion, and firing for other applications. Last, the clay material passes through a final
grinding and screening stage and then is packed for shipping and storage.
2.1.1.3 Fuller's Earth Processing
The processing flow diagram for fuller's earth is shown in Figure 2-4. Fuller's earth
initially passes through two crushing stages to reduce the material to the required size. The
crushed material is then blunged in a pug mill and then may be dried and/or calcined. If
dried, the moisture content of the fuller's earth is reduced from approximately 45 percent to
between 0 to 10 percent. Calcining fuller's earth will also reduce the moisture content.
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Mining
Shredding
power shovels, front end loaders and
back hoes
disintegrators
Drying
Final Grinding
Storing and/or
Packing
rotary dryers or
vibrating dryers
hammer mill
roller mill
Grinding
Storing and/or
Packing
Figure 2-2. Ball Clay Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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Drying (optional)
Mining
power shovels, front end loaders, back
hoes, and shale planers
Crushing
jaw crushers or gyratory crushers
T
Screening
electromagnetic or mechanically
vibrating screens
rotary or
vibrating grate
dryers
pug mills, extruders,
and kilns
Blunging, Extruding,
and/or Firing
Final Grinding and Screening
rotating pan crushers, cone crushers,
smooth roll crushers, toothed roll
crushers, or hammer, ball, rod, and
pebble mills
Packaging and Storage
Figure 2-3. Common Clay and Shale Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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f
Drying
Mining
power shovels, front end loaders, and
back hoes
Primary Crushing
and Grinding
jaw crushers or gyratory crushers
Secondary Crushing
and Grinding
Blunging
rotating pan crushers, cone crushers,
smooth roll crushers, and toothed roll
crushers
pug mills
rotary or fluid
bed dryers
calciners
Calcining
Final Grinding and
Screening
roller or hammer mills
Packaging and Storage
Figure 2-4. Fuller's Earth Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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Once the clay material is calcined, it proceeds to a final grinding stage which is accomplished
using roller or hammer mills. The ground material is then screened for size and is ready for
shipping.
2.1.1.4 Kaolin Processing
The processing of kaolin depends on the end product it will be used for. Kaolin may
be processed through a dry or wet method. Kaolin that is processed through the dry method
is used to produce sanitaryware, rubber products, and paper filling. The wet process is used
when kaolin is being prepared as an input for paper coating. Figure 2-5 illustrates both the
dry and wet production processes of kaolin.
The dry process is a bit simpler than the wet process. In the dry process, kaolin is first
crushed and then dried in rotary dryers. The dried material is then pulverized and air-floated
to remove impurities and grit. The kaolin is next screened to ensure it has been reduced to the
proper size and then is packed for shipping.
In the wet process, kaolin is crushed and then blunged in a pug mill to produce a
slurry. It may then be chemically treated through a bleaching process for purification.
Physical or magnetic methods may also be used to purify the clay material. This refined
slurry is then dried and screened for size. The kaolin that passes through the screen proceeds
to the calcining stage and is then ready for storage and shipping.
2.1.1.5 Fire Clay Processing
When fire clay is first mined, it is stockpiled in order to allow the clay material to
become weathered. The weathering of fire clay involves freezing and thawing which helps to
break up the material for processing. This process also improves the plastic-like composition
of the clay. The fire clay is now prepared for processing and at this point, has a moisture
content of 10 to 15 percent. The fire clay is now crushed and ground and then it can either be
dried or calcined.
For certain applications, the fire clay is dried in order to reduce the moisture content
to less than 7 percent. This is accomplished through the use of rotary and vibrating grate
dryers. The other option is to calcine the material which not only eliminates moisture, but
also reduces the amount of organic material. When calcined, a chemical reaction occurs
between the alumina and silica that is present in the fire clay. This in turn results in a harder,
denser material that can be crushed more easily. Last, the dried or calcined fire clay is
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Mining
power shovels, front end loaders, and/or
back hoes
Dry process
V
Drying
Pulverizing
Air floating
Screening
Packing and Storage
Crushing and Grinding
rotary dryers
crushers and
grinders
electromagnetic or
mechanically
vibrating screens
jaw crushers and gyratory crushers
Wet process
pug mills
physical or
magnetic
methods
rotary dryers
electromagnetic
or mechanically
vibrating screens
calciners
Blunging
Chemical processing
and/or bleaching
T
Drying
Screening
Calcining
Packing and Storage
Figure 2-5. Kaolin Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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crushed and screened again. The fire clay that passes through the screens is now ready for
packing and shipping. A flow diagram of the fire clay processing can be found in Figure 2-6.
2.1.1.6 Bentonite Processing
When bentonite is first mined and stockpiled, its moisture content is often too high to
begin processing immediately. If the moisture content of mined bentonite is between 30 to
35 percent, it is plowed to help it air dry to a moisture content of 16 to 18 percent. This
lower-moisture bentonite is then crushed to reduce the size of the clay material to pieces that
are less than 2.5 centimeters in size. It is screened to ensure that it has been reduced to the
correct size. The screened material is then dried in rotary or fluid bed dryers to reduce the
moisture content to 7 to 8 percent. The dried material proceeds to a final crushing using
roller or hammer mills and then is screened again. Figure 2-7 displays a flow diagram of
bentonite processing.
2.1.2 Emissions from the Processing of Clay Minerals
Clay minerals processing results in emissions of HAPs and other pollutants. These
pollutants include particulate matter (PM) , carbon monoxide (CO), carbon dioxide (CO2),
nitrogen oxides (NOX), sulfur oxides (SOX), and the hazardous air pollutants hydrogen
fluoride (HF) and hydrogen chloride (HC1). Trace amounts of the HAP metals beryllium
(Be), cadmium (Cd), cobalt (Co), chromium (Cr), mercury (Hg), manganese (Mn), nickel
(Ni), lead (Pb), antimony (Sb), and selenium (Se) may also be present in raw clay material
and released in particulate form as it is processed; however available data indicate that total
HAP metals are only equal to less than one-tenth of one percent of the PM emitted from plant
sites that process clay minerals. All dry mechanical processes, such as crushing, grinding,
screening, materials handling, and materials transfer operations result in PM emissions. Fuel
combustion at the dryers result in the emissions of CO, CO2, NOX, and SOX while HF and
HC1 emissions arise from the calciners.
2.1.3 Costs of Production
This section discusses the costs of processing clay minerals. There are several types
of costs involved, such as:
• capital expenditures, including the costs of mining and processing
equipment;
• energy costs, which are the costs of electricity and fuels used to process clay;
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Drying
Mining
power shovels, front end loaders,
and back hoes
Stockpiling and
Weathering
sheds
Prim
imary Crushing
and Grinding
jaw crushers and gyratory crushers
rotary and
vibrating grate
dryers
calciners
Calcining
Final Grinding
and Screening
rotary pan crushers, cone crushers,
smooth roll crushers, toothed roll
crushers, and/or hammer, ball, rod
and pebble mills
Packaging and Storage
Figure 2-6. Fire Clay Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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Mining
Plowing
Crushing
power shovels, front end loaders, and
back hoes
plows
jaw crushers and gyratory crushers
Screening
Drying
electromagnetic or mechanically
vibrating screens
rotary or fluid bed dryers
Final Crushing and
Screening
rollermills or hammermills
electromagnetic or mechanically
vibrating screens
Packaging and Storage
Figure 2-7. Bentonite Processing Flow Diagram
Source: U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42, Section 11.25, "Clay Processing: Final Report."
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labor costs, including the costs associated with employees wages and
benefits; and
• the cost of materials, which are the costs of tangible inputs such as additives.
Table 2-1 shows the 1997 production costs of processing clay minerals and Table 2-2
provides these costs as a share of the value of shipments (VOS) for the three SIC-defined clay
minerals processing industries. For the Kaolin and Ball Clay industry (SIC 1455), the Clay,
Ceramic, and Refractory Minerals, n.e.c. industry (SIC 1459), and the Minerals and Earths,
Ground or Otherwise Treated industry (SIC 3295), the cost of materials in 1997 account for
the largest share of costs in each industry, followed by labor costs. As shown in Tables 2-1
and 2-2, the cost of materials are $264.4 million, or almost 29 percent of the industry's value
of shipments for SIC 1455. For SIC 1459, the cost of materials are $194.2 million. This is
equal to 31 percent of this industry's value of shipments. Last is SIC 3295, which has a cost
of materials equal to $793.6 million, or 34 percent of this industry's value of shipments.
Table 2-1. 1997 Production Costs for the Clay Minerals Processing Industries
Costs ($106)
Labor Costs
Capital Expenditures
Cost of Materials
Energy Costs
Sum of Costs
Value of Shipments
SIC 1455
$141.31
$76.43
$264.38
$99.15
$581.27
$917.29
SIC 1459
$118.31
$72.21
$194.17
$62.28
$446.97
$618.26
SIC 3295
$355.09
$138.02
$793.64
$137.01
$1,423.76
$2,316.94
Source: U.S. Department of Commerce, Bureau of the Census. 1999. 1997 Economic Census,
Manufacturing Industry Series, "Kaolin and Ball Clay Mining."
U.S. Department of Commerce, Bureau of the Census. 1999. 1997 Economic Census,
Mining Industry Series, "Clay and Ceramic and Refractory Minerals Mining."
U.S. Department of Commerce, Bureau of the Census. 1999. 7997 Economic Census,
Mining Industry Series, "Ground or Treated Mineral and Earth Manufacturing."
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Table 2-2. 1997 Costs as Shares of the Value of Shipments (VOS) for the Clay Minerals
Processing Industries
Costs as a Share of the VOS
Labor Costs Share
Capital Expenditures Share
Cost of Materials Share
Energy Costs Share
Sum of Costs Share
SIC 1455
15.41%
8.33%
28.82%
10.81%
63.37%
SIC 1459
19.14%
11.68%
31.41%
10.07%
72.29%
SIC 3295
15.33%
5.96%
34.25%
5.91%
61.45%
Source: U.S. Department of Commerce, Bureau of the Census. 1999. 7997 Economic Census,
Manufacturing Industry Series, "Kaolin and Ball Clay Mining."
U.S. Department of Commerce, Bureau of the Census. 1999. 7997 Economic Census,
Mining Industry Series, "Clay and Ceramic and Refractory Minerals Mining."
U.S. Department of Commerce, Bureau of the Census. 1999. 7997 Economic Census,
Mining Industry Series, "Ground or Treated Mineral and Earth Manufacturing."
Labor costs for SIC 1455 and SIC 3295 are slightly above 15 percent of the value of
shipments for each of these industries and they are just over 19 percent for SIC 1459. Energy
costs and capital expenditures account for smaller shares of the production costs for these
industries. The 1997 average earnings per hour of production workers was $15.96 for SIC
1455, was $14.55 for SIC 1459, and was $15.08 for SIC 3295.
2.2 Uses, Consumers, and Substitutes
Processed clay is not a final good, but rather is an intermediate good used as an input
to the production of various construction and building materials, ceramics and pottery, and
adhesives, fillers, and extenders. The following section describes the end uses, consumers,
and substitutes of processed clay material. In Section 2.2.1, the various uses for the six major
types of clay minerals are described. Section 2.2.2 identifies the intermediate and final
consumers of clay material. Last, the different products that can act as substitutes for clay are
described in Section 2.2.3.
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2.2.7 End Uses of Clay Minerals
In 1996, 43.2 million metric tons of clay minerals were processed in the United
States. The main use of these clay minerals was as inputs to the production of various
intermediate and final goods. Some of the intermediate goods that clays are used to produce
include brick, tile, paint, structural clay products, sanitaryware, and lightweight aggregate.
Many of these products are used in the construction of homes, buildings, and structures. Clay
is also used as an input to the production of final goods such as pottery, pet litter, cosmetics,
paper, and dinnerware.
Clay has a variety of characteristics that make it an attractive input for the products
mentioned above. Because clay is pliable when wet, it can be easily molded and shaped.
When clay dries, it acts as an absorbent which is why it is the main input in the production of
pet litter. Clay that is dried also becomes fireproof, thus making it a desirable input to the
manufacture of roof, floor, and wall tiles. If clay is glazed and fired, it is rendered waterproof
and non-absorbent. This makes clay a common input to the production of sanitaryware, such
as lavatories, sinks, and bathtubs, and dinnerware, such as plates, bowls, and saucers. Clay
sanitaryware and dinnerware do not absorb germs and can be cleaned with ease.
Table 2-3 shows the total quantity of each clay type processed and each clay type's
share of the total quantity of the domestic clays processed in the U.S. in 1996. Of the various
clay minerals, common clay and shale makes up over 60 percent of the total quantity of clay
minerals produced domestically. This clay type represents the largest share of the total
quantity. Since common clay and shale is the main input to the production of bricks, cement,
and lightweight aggregate, a majority of the clay that is processed in the U.S. goes towards
the production of construction materials. The clay type with the second largest share is
kaolin, which makes up over 21 percent of the total quantity. Kaolin is used in a diverse set
of applications. The other clay minerals represent smaller shares of the total quantity of clay
minerals processed in 1996.
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Table 2-3. Domestic Quantities, Shares, and Prices of Processed Clay Minerals in 1996
Clay Minerals
Ball Clay
Common Clay and
Shale
Fuller's Earth
Kaolin
Fire Clay
Bentonite
Total
Quantity
(103 metric tons)
935
26,200
2,600
9,180
505
3,740
43,160
Share of Total
Quantity
2.2%
60.7%
6.0%
21.3%
1.2%
8.7%
100.0%
Price
$44.81
$5.50
$106.92
$119.83
$21.19
$35.83
NA
Notes: NA means not applicable
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997': Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
Table 2-3 also shows the prices of the .various clay minerals in 1996. The most
expensive of the clay minerals is kaolin, followed closely by fuller's earth. The least
expensive clay is common clay and shale. The cost of the clay minerals affect the prices of
the products they are used to produce. For example, bricks and lightweight aggregate are
inexpensive relative to dinnerware and sanitaryware. This is because common clay and shale,
the main clay input to construction materials, is much cheaper than ball clay and kaolin which
are used to produce fine china, sinks, bathtubs, and other bathroom accessories.
The different types of clay minerals are used in various applications, however, there is
some overlap in the products for which the different clay materials can be used. In the
figures that follow, the proportions of each clay type used in different applications are shown
for each type of clay. The share of each clay type that is exported is also portrayed in these
figures.
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Figure 2-8 illustrates the end uses and the shares of ball clay used in each of its
applications. Of the 935 thousand metric tons of ball clay processed in 1996, 24 percent was
used to produce floor and wall tile, while 22 percent was used for sanitaryware. Other uses
of ball clay include pottery, refractories, and fillers, extenders, and binders. Exports of ball
clay were equal to about 14 percent of the total quantity of ball clay processed in 1996.
Exports
14%
Filler, extenders, and binders
8%
Miscellaneous
6%
Sanitaryware
22%
Floor and wall tile
24%
Ceramics
5%
Refractories
8%
935,000 Metric Tons of Ball Clay
Figure 2-8. Distribution of Ball Clay by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume 1. U.S. Geological Survey. U.S. Government Printing Office.
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Common clay and shale is used almost exclusively as an input to the production of
building materials. Below, Figure 2-9 shows that extruded brick accounts for the largest
share of the total common clay and shale processed in 1996 (43 percent) followed by
Portland and other cements (27 percent) and lightweight aggregate (15 percent). The
additional uses for common clay and shale are for various other types of building materials.
Of all of the clay minerals, common clay and shale is the only one which is not exported from
the U.S.
Refractories
2%
Miscellaneous
r 3%
Other heavy clay products
3%
Portland and other cements
27%
Brick, extruded
43%
Lightwight aggregate
15%
Brick, other
7%
26,200,000 Metric Tons of Common Clay and Shale
Figure 2-9. Distribution of Common Clay and Shale by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume 1. U.S. Geological Survey. U.S. Government Printing Office.
2-19
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A majority of the fuller's earth that was processed in 1996 went towards absorbents
(69 percent), as shown in Figure 2-10. The main type of absorbent that fuller's earth is used
for is pet litter. The second largest end use of fuller's earth is as an input to pesticides and
related products (10 percent). Other end products that use smaller shares of fuller's earth,
such as animal feed and fillers, extenders, and binders, are also presented.
Miscellaneous
7%
Pesticides and related products
10%
Fillers, extenders, and binders
3%
Fertilizers
2%
Animal feed ^BHU^BB^HHraHr 69%
3%
2,610,000 Metric Tons of Fuller's Earth
Figure 2-10. Distribution of Fuller's Earth by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume 1. U.S. Geological Survey. U.S. Government Printing Office.
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Of the 9 million metric tons of kaolin processed in the U.S. in 1996, 31 percent was
used for paper coating. This is the end use in which the largest share of kaolin was used.
Kaolin was also used as an input to refractories (10 percent) as well as paper filling (9
percent). As Figure 2-11 shows, kaolin is an input to a variety of end products. Because of
its versatility, a relatively large share of kaolin is exported abroad.
Ceramics
5%
Exports ^^^te^ Glass fiber, mineralwol
27% ^ IB^ST— 5%
Paper coating
31%
Miscellaneous
10%
Refractories Paper filling
10% 9%
9,180,000 Metric Tons of Kaolin
Figure 2-11. Distribution of Kaolin by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume 1. U.S. Geological Survey. U.S. Government Printing Office.
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While kaolin is one of the most versatile clay inputs, fire clay is one of the least (see
Figure 2-12 below). It also represents the smallest share of all of the clay types processed in
1996 (1.2 percent). Even though fire clay represents the smallest clay category, it still is a
valuable input. The characteristic that makes fire clay unique is its ability to withstand
extremely high temperatures relative to other clay minerals. For this reason, it's main use is
as an input to refractories. As shown in Figure 2-12, 70 percent of all of the fire clay
domestically processed in 1996 was used for refractories. The other major use was as an
input to heavy clay products and lightweight aggregate.
Heavy clay products and
Miscellaneous and exports lightweight aggregate
14% 16%
Refractories
70%
505,000 Metric Tons of Fire Clay
Figure 2-12. Distribution of Fire Clay by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume 1. U.S. Geological Survey. U.S. Government Printing Office.
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One of the main uses of bentonite is as an absorbent, however, this is not the most
major use of this clay. As shown in Figure 2-13, the most common use of bentonite is as an
input to foundry sand. Of the 3.7 million metric tons of bentonite processed in 1996 in the
U.S., 21 percent went towards the production of foundry sand, 19 percent went towards
absorbents, 18 percent went towards the pelletizing of iron ore, and 15 percent went towards
drilling mud.
Exports
Absorbents
19%
Waterproofing and sealing
6%
Miscellaneous
10%
Drilling mud
15%
Pelletizing (iron ore)
18%
^•J ^
Foundry sand
21%
3,740,000 Metric Tons of Bentonite
Figure 2-13. Distribution of Bentonite by End Use: 1996
Source: Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996:
Volume ]. U.S. Geological Survey. U.S. Government Printing Office.
2.2.2 Consumers of Clay Minerals
There are several types of consumers of clay, but virtually all of the immediate
consumers purchase clay material as an input for production. The types of clay producers
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purchase depends on what they produce. The producers of clay-based construction and
building materials are the major purchasing group of common clay and shale, since the main
application of this clay is as an input to cement, brick, and lightweight aggregate. Building
material producers also purchase ball clay to use as an input to floor, wall, and roofing tile,
and limited amounts of fire clay for use in heavy clay products and lightweight aggregate.
Once these clay-based building products are produced, they are then sold to construction
companies and contractors who then use these products to build homes, buildings, and
structures.
Producers of pet litter and oil and grease absorbents are the main purchasers of the
clay fuller's earth. This clay is characterized as the most absorbent. In addition, these
producers also purchase bentonite to use in the production of their absorbent products. The
paper manufacturers are one of the major purchasers of kaolin, since this clay is commonly
used as a paper coating and filler. The producers in the paper industry find kaolin the only
suitable clay to use for paper manufacturing. Other immediate consumers of kaolin include
china and fine dinnerware producers. Sanitaryware producers use ball clay to produce sinks,
drinking fountains, and flush tanks since this type of clay is completely non-absorbent and
maintains a uniform color when glazed and fired. The main type of clay used by refractories
is fire clay, due to its ability to withstand heat.
Clay is minerals are used in such a wide array of products, that virtually all consumers
purchase products which contain clay. Clay minerals are found in pottery, ceramics, paints,
cosmetics, fertilizers, homes, absorbents, sanitaryware, and a host of other products. Once
these products are produced, they are then sold to their final consumers. Final consumers are
said to have an indirect demand for clay minerals since they purchase products produced
using clay as an input, but not clay material in is raw form.
2.2.3 Substitutes for Clay Minerals
Several substitutes exist for the various clay minerals but for many products, the six
clay categories are substitutable. For example, fuller's earth and bentonite can both be used
as absorbents, kaolin and fire clay are both used in refractories, ball clay and fuller's earth are
common inputs to binders, fillers, and extenders, kaolin and ball clay are used to produce
ceramics, and common clay and shale and fire clay are both used in heavy clay products and
lightweight aggregate. Aside from these, there are other materials that are used as substitutes
for clay minerals in the production of several intermediate and final goods.
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One of the main applications of ball clay is sanitary ware. Alternative materials that
can be used to produce sinks, flush tanks, and drinking fountains include stainless or
enameled steel, enameled cast iron, plastics, fiberglass, and marble. Many of these
alternatives possess similar characteristics as ball clay, such as fire- and water-resistance and
non-absorbency of harmful germs and bacteria, thus making them suitable inputs for
sanitary ware production. Sanitaryware prices differ based on the type of material used in
production. In general, plastics and fiberglass are relatively cheap, while cast iron and marble
are more expensive.
Aside from sanitaryware, ball clay is also used to produce floor and wall tile. In this
application, no suitable substitutes exist for ball clay. There are alternatives to floor and wall
tiling however. Instead of tiles, floors and walls can be covered with wood, linoleum, vinyl,
marble, or plaster. Each of these alternatives to tiling has advantages and disadvantages
relative to clay. For example, vinyl and linoleum are relatively cheap, but they are not as
durable. Wood is considered by many an attractive floor covering relative to tiling, but it
may be subject to wood rot or pests. Marble is also a highly valued floor and wall covering,
but is much more expensive.
Common clay and shale's main application is as an input to brick and other building
materials. Common clay and shale is the only available input to the production of bricks,
therefore in this application, there is no substitute. There are substitutes to brick as a material
used for the exterior walls of buildings and structures however. Aluminum and vinyl siding
can be nailed to the exterior of homes, buildings, and structures. Siding protects homes from
weather, fire, and pests, as does brick, but it is relatively weak as an insulator. Wood or
hardboard is another common building material that can be used for home exteriors. It can
painted over or it can be left as it is. In contrast, brick is not often painted over, but rather left
in its natural state. Stucco, a combination of sand, cement, and water, is a third possible
material to use for the exterior of homes. It is the sturdiest of the three substitute materials
listed here, but over time, it develops cracks unless it is properly maintained.
As an input, fuller's earth is predominantly used in pet litter and as an oil and grease
absorbent. Bentonite is a substitute for fuller's earth in these applications because it is
similar in composition to this clay type.
Kaolin is a clay with many uses, but there are substitutes for some of its applications.
One use of kaolin is as an extender, but fuller's earth, serves this function as well. Kaolin is
also used as a paper filler, and a substitute for this application exists as well. Talc, often used
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to in baby powder, is another material used as a paper filler. Of the talc consumed in the
U.S., about one-fifth is used by the paper industry. While talc is a good substitute for kaolin
in this application, it is still not as competitive as kaolin in this industry.
The predominant use of fire clay is as an input to refractories. Kaolin is also used in
this application though not to the same extent. Another substitute for fire clay in refractories
is pyrophyllite because of its ability to withstand extremely high temperatures. In 1997, the
largest increase in consumption of pyrophyllite was for refractory use. This seems to indicate
that pyrophyllite is becoming increasingly competitive with fire clay in refractories.
As previously mentioned, bentonite is an alternative input to absorbents. This is not
its only application however. Bentonite is also used in iron ore pelletizing, foundry sands,
and drilling muds. Substitutes for bentonite in drilling muds are the hormite clays. Hormite
clays are actually thought to be superior to bentonite in this application because they are less
sensitive to salt, thus allowing them to produce a higher mud yield. As inputs to drilling
muds, the hormite clays may be superior, but bentonite is relatively cheaper.
2.3 Industry Organization
This report addresses the economic impacts of pollution control requirements on
facilities that process clay minerals. Because there are costs associated with the control of
HAPs, it is important to determine how the industry may be affected. This section provides
an description of the clay mining and processing industry at both the facility-level and the
company-level. Section 2.3.1 first provides an overview of the market structure of the clay
minerals processing industry. Section 2.3.2 characterizes the processing facilities in this
industry, while the parent companies of these facilities are described in Section 2.3.3. Last,
Section 2.3.4 provides data on domestic processing, foreign trade, and apparent consumption
of the various clay minerals.
2.3.1 Market Structure
Market structure is of interest because it determines the behavior of producers and
consumers in the industry. In perfectly competitive industries, no producer or consumer is
able to influence the price of the product sold. In addition, producers are unable to affect the
price of inputs purchased for use in production. This condition is most likely to hold if the
industry has a large number of buyers and sellers, the products sold and inputs used in
production are homogeneous, and entry and exit of firms is unrestricted. Entry and exit of
firms are unrestricted for most industries, except in cases where the government regulates
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who is able to produce output, where one firm holds a patent on a product, where one firm
owns the entire stock of a critical input, or where a single firm is able to supply the entire
market. In industries that are not perfectly competitive, producer and/or consumer behavior
can have an effect on price.
Concentration ratios (CRs) and the Herfindahl-Hirschman index (HHI) can provide
some insight into the competitiveness of an industry. The concentration ratios and the
Herfindahl-Hirschman index are calculated using the sales data of the parent companies that
own the clay mining and processing facilities. Table 2-4 provides the four- and eight-firm
concentration ratios (CR4 and CRS, respectively), as well as the HHI for the clay minerals
mining and processing industry. The CR4, the percentage of sales of the top four companies
in the industry, was approximately 69 percent while the CRS was almost 85 percent. These
ratios seem to indicate that the industry is concentrated to some degree.
Table 2-4. Measures of Market Concentration for the Clay Minerals Mining and
Processing Industry
Total Sales
(S106) CR4 CRS HHI
$12,020.12 68.6% 84.5% 1655
Notes: CR4 and CRS are the concentration ratios of the top 4 and 8 firms in the industry (by sales)
respectively. HHI refers to the Herfindahl-Hirschman Index, which is the sum of squared market
shares for each company in a given industry. Total sales data for the parent companies are from the
years 1997 and 1998.
Sources: Dun and Bradstreet. Dun and Bradstreet Market Identifiers Electronic Database. 1999.
Dun and Bradstreet. Dun and Bradstreet Financial Records Plus Electronic Database. 1999.
Dun and Bradstreet. Dun and Bradstreet Canadian Market Identifiers Electronic Database. 1999.
The criteria for evaluating the HHIs are based on the 1992 Department of Justice's
Horizontal Merger Guidelines. According to these criteria, industries with HHIs below 1,000
are considered unconcentrated (i.e., more competitive), those with HHIs between 1,000 and
1,800 are considered moderately concentrated (i.e., moderately competitive), and those with
HHIs above 1,800 are considered highly concentrated (i.e., less competitive). In general,
firms in less concentrated industries are more likely to be price takers, while those in more
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concentrated industries have more ability to influence market prices. Taken together, these
data indicate that the clay minerals and mining industry is moderately concentrated.
2.3.2 Clay Minerals Processing Facilities
There are currently 76 clay mineral processing facilities in the United States. Most of
them process a single type of clay but five of the facilities process two types of clays. Table
2-5 shows the number of facilities that process each type of clay. The clay type processed at
the largest number of plants is kaolin, followed by bentonite. Fuller's earth is only processed
at two facilities. Of the 76 facilities, one did not indicate the type of clay they process.
Table 2-5. Number of Facilities That Process the Different Types of Clay Minerals
Clay Mineral Number of Facilities
Ball Clay 11
Common Clay and Shale 6
Fuller's Earth 5
Kaolin 31
Fire Clay 7
Bentonite 13
Other Minerals 6
Note: The number of facilities sums to 79 because five facilities process more than one type of clay and one
of the facilities did not indicate the type of clay they process.
Source: U.S. Environmental Protection Agency. 1999. Memorandum from Midwest Research Institute to Jeff
Telander, Emissions Standards Division, Office of Air Quality Planning and Standards, "Preliminary
Industry Characterization Data Inputs for ISEG, Clay Minerals Processing Facilities," September 21.
The table shows that six facilities process other types of minerals. This category is a
composite of several minor mineral categories which include bauxite, mullite, kyanite, and
catalysts. While there are facilities included in this report that do process these minor
mineral types, they have not been discussed in detail because these minerals are not clays.
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The size of facilities depends on whether or not they are integrated or non-integrated.
Integrated facilities include clay mining operations, while non-integrated facilities conduct
clay processing operations only. These non-integrated facilities must purchase their clay
minerals from a mining facility and then process them to prepare them for sale. While most
facilities do include clay mining pits, they are not necessarily located in the same place as the
processing facilities. Usually though, they are located near sources of clay minerals so that
the cost of transporting them to the processing facilities is kept low. Thus, the location of the
76 facilities is determined by where clay minerals can be found. These facilities are located
across 20 different states. Georgia has a disproportionately high number of facilities with 25.
The rest of the states contain 5 facilities or less. Table 2-6 lists the states in which the
facilities are located along with the number of facilities in each state.
2.3.3 Companies
The Agency identified 34 ultimate parent companies (listed in Appendix A) that
currently own and operate the 76 potentially affected facilities within this source category.
Two of the 76 facilities are jointly owned by companies. Sales and employment data for
these owning entities were obtained from either their survey response or one of the following
secondary sources:
Canadian Dun's Market Identifiers (Dun & Bradstreet, 1999)
Dun's Market Identifiers (Dun & Bradstreet, 1999)
Dun's Financial Record Plus (Dun & Bradstreet, 1999)
• Hoover's Company Profiles Online (Hoover's Companies & Industries, 2001)
Kompass USA (Kompass International, 1999)
Securities and Exchange Commission's 10-K Company Reports (1999)
Standard and Poors Register-Corporate (Standard & Poors Corp., 1999)
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Table 2-6. Location of Potentially Affected Facilities by State
State
Alabama
Arkansas
California
Florida
Georgia
Illinois
Indiana
Kansas
Kentucky
Michigan
Missouri
Mississippi
North Carolina
Ohio
South Carolina
South Dakota
Tennessee
Texas
Virginia
Wyoming
Total
Number of Facilities
1
3
4
3
25
1
1
1
3
1
4
4
1
3
2
3
5
5
1
5
76
Source: U.S. Environmental Protection Agency. 1999. Memorandum from Midwest Research Institute to Jeff
Telander, Emissions Standards Division, Office of Air Quality Planning and Standards, "Preliminary
Industry Characterization Data Inputs of Clay Minerals Processing Facilities," September 21.
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Annual sales and employment data were available for 33 of the 34 companies (97
percent). The average (median) sales of companies reporting data were $372.3 million ($50.0
million). This includes revenues from operations other than clay minerals mining and
processing operations. The average (median) employment for these companies was 1,402
(350) workers.
The top four companies in annual sales for the year 19971 are:
Engelhard Corporation - $3.63 billion with 6,872 employees;
• Clorox Company, Incorporated - $2.74 billion with 6,600 employees;
Imerys - $2.63 billion with 11,948 employees; and
J.M. Huber Corporation - $ 1.23 billion with 6,000 employees.
These companies can also be grouped into small and large categories using Small
Business Administration (SBA) general size standard definitions for SIC codes. There are
ten different SIC codes, which correspond to a total of sixteen different NAICS codes across
the ultimate parent companies owning these facilities. The SBA defines a business as small
based on the number of employees . For these NAICS codes, the small business definition
ranges between 100 to 500 employees or $5 million in sales. Using these size standards and
available data, the Agency has identified 16 small businesses, or 44 percent of all companies
within this source category. The annual average (median) sales for these companies are
$26.7 million ($14.8 million), and the average (median) employment for these companies is
125 employees (90 employees).
2.3.4 Market Data and Trends
This section presents historical market data for the clay minerals markets. Data were
obtained from the U.S. Geological Survey's Minerals Yearbook (1997). Table 2-7 provides
historical market data on the clay minerals processed and sold domestically, including the
total quantity, value, foreign trade, and apparent consumption for the years 1993 through
1997 and Tables 2-8 through 2-13 provide this same data for each clay type.
1 Annual sales for these firms are from the year 1997 with the exception of Imerys, where data from the
year 2000 are presented.
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As shown in Table 2-7, the average annual growth rate of the quantity of domestically
processed clay minerals over the years 1993 to 1997 is 0.8 percent. The quantity of all clay
minerals increased from 40.7 million metric tons in 1993 to a peak of 43.1 million metric
tons in the years 1995 and 1996. The quantity of processed clays then decreased to 42.0
million metric tons in 1997. The value of the clay minerals was at its lowest in 1993 at $1.47
million and it reached its peak in 1995 with a value of $1.73 million, which corresponds with
the quantities of clays produced in these years. Note, however, that the same quantity of
clays was produced in 1995 and 1996, but the total value of these clay minerals was lower in
1996. In 1995, the value per metric ton was $40.14, while in 1996 the value per metric ton
was $39.68.
Table 2-7. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Domestically Processed Clay Minerals ($103): 1993 - 1997
Year
1993
1994
1995
1996
1997
1993-1997
Quantity
40,700
42,000
43,100
43,100
42,000
0.8%
Total
Value
$1,470,000
$1,590,000
$1,730,000
$1,710,000
$1,670,000
Average Annual
3.4%
Exports
4,150
4,620
4,680
4,830
5,080
Growth Rates
5.3%
Imports
39
36
35
45
64
15.1%
Apparent
Consumption
36,589
37,416
38,455
38,315
36,984
0.3%
Note: Data for quantity, total value, and exports is rounded to three significant digits while data for imports is
rounded to two significant digits. .Data reflect the information provided in U.S. Geological Survey
(1999) and may not be equal to the sum of the total quantities of each individual clay type.
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
The average annual growth rates of imports and exports are 15.1 percent and 5.3
percent, respectively. The average annual growth rate of clay imports shows that the amount
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of clay minerals coming to the U.S. has increased over the years 1993 to 1997, but these
imports do not represent a significant share of the clay minerals consumed in the U.S. A
measure of the U.S. reliance on imports can be calculated as the ratio of imports to apparent
consumption. In 1996, this ratio is only equal to 0.1 percent. The reason why the average
annual growth rate for imports appears so large is because there were significant increases in
clay mineral imports from 1995 to 1996 and from 1996 to 1997, as shown in Table 2-7. The
average annual growth rate of exports is smaller than it is for imports, but the U.S. exports a
larger quantity of clay minerals than it imports. The ratio of exports to the total quantity of
clays processed in the U.S. can be calculated to measure how much of what is processed in
the U.S. is sold abroad. The ratio of exports to total quantity processed in the U.S. for 1996
is equal to 11.2 percent.
As shown in Table 2-8, both the quantity and value of ball clay showed a net increase
over the 1993 to 1997 time period. The average annual growth rates of the domestic
quantities processed and consumed are 3.7 percent and 0.8 percent, respectively. The low
Table 2-8. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Ball Clay ($103): 1993 -1997
Year
1993
1994
1995
1996
1997
1994-1997
Quantity
911
1,020
993
935
1,040
3.7%
Total
Value
$38,500
$44,900
$45,500
$41,900
$48,100
Average Annual
6.2%
Exports
NA
81
28
80
91
Growth Rates
44.7%
Imports
NA
.84
1.37
1.4
.82
8.3%
Apparent
Consumption
NA
939.8
966.4
856.4
949.8
0.8%
Note: Data for quantity, total value, exports, and imports is rounded to three significant digits.
NA = not available.
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays" In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
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average annual growth rate for apparent U.S. consumption is likely caused by the anomalous
drop in the apparent consumption of ball clay in 1996. In that year, the U.S. processed and
consumed the smallest quantities of ball clay over the time period covered. However, a
closer examination of the consumption data reveals that there was a rise in the quantity of
ball clay consumed from 1996 to 1997. This provides supporting evidence for the claim that
the domestic market for ball clay is growing.
Table 2-9 provides market data for the common clay and shale market over the years
1993 to 1997. Foreign trade data are not presented for common clay and shale because this
clay type isn't generally exported and data on imports are unavailable. Since import data are
unavailable, apparent consumption of common clay and shale cannot be calculated. We can,
however, examine the quantity of common clay and shale produced domestically and draw
comparisons to the other clays. Relative to ball clay, larger quantities of common clay and
shale are processed in the U.S. The average quantity of ball clay produced per year was
approximately 980 thousand metric tons while the average quantity of common clay and
shale processed per year over the same period was approximately 25.5 million metric tons.
Table 2-9. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Common Clay and Shale ($103): 1993 - 1997
Year
1993
1994
1995
1996
1997
Quantity
25,300
25,800
25,600
26,200
24,500
Total
Value
$137,000
$137,000
$151,000
$144,000
$149,000
Average Annual Growth Rates
1993-1997
-0.7%
2.3%
Note: Data for quantity and total value are rounded to three significant digits.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
2-34
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In fact, as shown earlier in Table 2-3, common clay and shale makes up the largest category
of the clay minerals market. Even though the absolute amounts of common clay and shale
are relatively large, the average annual growth rate of the quantity processed is negative (-0.7
percent). The negative growth rate seems to indicate a shrinking market for common clay
and shale, however this result is driven by the reduction in the quantity of common clay and
shale processed between the years 1996 and 1997. After reaching a peak quantity of 26.2
million metric tons in 1996, the quantity of common clay and shale processed in 1997 fell to
its lowest level (24.5 million metric tons). The average annual growth rate of the total value
of common clay and shale for this time period is 2.3 percent. The total value of common clay
and shale was at its lowest in 1993 and 1994 and it reached its peak in 1995.
Like common clay and shale, the data for fuller's earth in Table 2-10 also indicates a
shrinking market. The average annual growth rates for quantity and apparent consumption
are both negative, although the rate is much more negative for apparent consumption. The
quantity of fuller's earth processed in the U.S. has steadily decreased every year between
1995 and 1997, with the largest reduction in quantity occurring between 1996 and 1997.
Table 2-10. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Fuller's Earth (S103): 1993 -1997
Year
1993
1994
1995
1996
1997
1993-1997
Quantity
2,480
2,640
2,640
2,600
2,370
-1.0%
Total
Value
$230,000
$244,000
$269,000
$278,000
$255,000
Average Annual
2.9%
Exports
NA
74
63
112
144
Growth Rates
30.5%
Imports
NA
1.44
.10
.37
3.50
344.7%
Apparent
Consumption
NA
2,567.4
2,577.1
2,488.4
2,229.5
-4.5%
Note: Data for quantity, total value, exports, and imports is rounded to three significant digits.
NA = not available
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
2-35
-------
In contrast, the quantity exported has shown an increasing trend. Since imports are not very
large for fuller's earth, or for any clay mineral for that matter, the apparent consumption of
fuller's earth has steadily declined over this time period. Exports and imports do not
constitute a large share of the quantity of fuller's earth that is processed or consumed, but the
average annual growth rates of the shipments of this clay mineral are extremely high. The
growth rate of exports was 78 percent from 1995 to 1996, therefore skewing the average
annual growth rate up to over 30 percent. For imports, the growth rate between 1996 and
1997 was 854 percent. This enormous rise in the import quantity of fuller's earth from one
year to the next drives the high average annual growth rate for imports overall. Just as in the
case of the data for all clay minerals, the average annual growth rates show significant
increases in exports and imports. However, the absolute quantities of these shipments are
small in comparison to the total domestic quantities of fuller's earth that are processed and
consumed.
Table 2-11 below displays the quantity, value, foreign trade, and apparent
consumption data for kaolin. Of the different types of clays, kaolin is the most expensive.
Table 2-11. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Kaolin ($103): 1993 - 1997
Year
1993
1994
1995
1996
1997
1993-1997
Quantity
8,830
8,770
9,480
9,180
9,410
1.7%
Total
Value
$957,000
$1,020,000
$1,110,000
$1,100,000
$1,040,000
Average Annual
2.3%
Exports
NA
3,180
3,240
3,240
3,380
Growth Rates
2.1%
Imports
NA
10.8
12
13
30.4
49.1%
Apparent
Consumption
NA
5,600.8
6,252 '
5,953.7
6,060.4
2.9%
Note: Data for quantity, total value, exports, and imports is rounded to three significant digits.
NA = not available
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume I.
U.S. Geological Survey. U.S. Government Printing Office.
2-36
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It has an average value of $114.42 per metric ton and its annual total value exceeded $1
billion for the years 1994 through 1997. According to Table 2-11, the market for kaolin has
grown. There has been a general increasing trend in the quantity of kaolin processed and the
average annual growth rate of apparent consumption between 1994 and 1997 is 2'.9 percent.
The quantity of kaolin exported has held steady and it makes up a significant share of the
domestic quantity processed. In fact, of the kaolin processed in the U.S. for the year 1996,
over 35 percent was exported. The quantity of kaolin imported makes up a very small share
of the kaolin consumed in the U.S. Imports in 1996 made up less than 1 percent of the
apparent consumption for that year.
Of all of the clay minerals, fire clay represents the smallest share of the whole clay
minerals market (1.2 percent). Table 2-12 provides evidence of the relatively small quantity
of fire clay produced annually. The average annual quantity of fire clay produced over the
years 1993 to 1997 is 530,400 metric tons. Even though the absolute quantity of fire clay
produced is small, the market has grown over the years 1993 to 1997. The average annual
Table 2-12. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Fire Clay ($103): 1993 - 1997
Year
1993
1994
1995
1996
1997
1993 - 1997
Quantity
459
456
583
505
649
10.6%
Total
Value
$11,500
$11,600
$12,800
$10,700
$9,450
Average Annual
-4.2%
Exports
NA
225
281
295
222
Growth Rates
1.7%
Imports
NA
1.03
1.35
0.36
0.70
-41.1%
Apparent
Consumption
NA
232
303.4
210.4
427.1
34.4%
Note: Data for quantity, total value, exports, and imports is rounded to three significant digits.
NA = not available
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
2-37
-------
growth rates for the quantity processed and the apparent consumption of fire clay are 10.6
percent and 34.4 percent, respectively. The relatively high growth rates are a result of the
large increases in the amount processed and the amount consumed from 1996 to 1997. The
annual growth rate for the amount of fire clay processed between the two years is 28.5
percent and it is over 103 percent for apparent consumption over these years.
The market data for bentonite, the last clay mineral covered in this report, can be
found in Table 2-13. Data for the year 1997 shows that the quantity, total value, exports,
imports, and apparent consumption of bentonite are largest for this year over the time period
examined. This provides evidence to show recent growth in the bentonite market. The
average annual growth rates of the quantity processed and the apparent consumption of
bentonite also provide evidence of a growing market for this clay mineral. Both growth rates
are quite high. Foreign trade of bentonite has also increased over the time period examined.
The average annual growth rate of imports is extremely high, 64.6 percent, but the quantity of
imports is not a significant share of the amount of bentonite consumed in the U.S.
Table 2-13. Historical Quantity (metric tons), Value, Foreign Trade, and Apparent
Consumption of Bentonite ($103): 1993 - 1997
Year
1993
1994
1995
1996
1997
1993-1997
Quantity
2,870
3,290
3,820
3,740
4,020
9.0%
Total
Value
$102,000
$136,000
$138,000
$134,000
$169,000
Average Annual
14.5%
Exports
NA
768
733
746
850
Growth Rates
3.7%
Imports
NA
2.1
3.1
7.5
7.6
64.6%
Apparent
Consumption
NA
2,524.1
3,090.1
3,001.5
3,177.6
8.5%
Note: Data for quantity, total value, exports, and imports is rounded to three significant digits.
NA = not available
Apparent Consumption = Total Value - Exports + Imports.
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume I.
U.S. Geological Survey. U.S. Government Printing Office.
2-38
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Table 2-14 presents historical price data on each of the six different clay minerals.
The difference is the price of clay minerals has a direct impact on the prices of clay-based
products sold. Kaolin, often used for find dinnerware, is the most expensive type of clay.
The average value of kaolin is $114 per metric ton. The next most expensive type of clay is
fuller's earth, whose average value is just over $100. Fuller's earth, as mentioned earlier, is
used to produce absorbents. The mid-priced clays are ball clay, bentonite, and fire clay, with
average values ranging from about $45 to $23. In comparison to fuller's earth and kaolin,
these clays are three to five times less expensive. The least expensive clay is common clay
and shale, which is primarily used for lightweight aggregate, brick, and cement.
Table 2-14. Historical Data on the Price per Metric Ton of Clay Minerals: 1993 - 1997
Year
1993
1994
1995
1996
1997
Average
Ball Clay
$42.26
$44.02
$45.82
$44.81
$46.25
$44.63
Common
Clay/Shale
$5.42
$5.31
$5.90
$5.50
$6.08
$5.64
Fuller's
Earth
$92.74
$92.42
$101.89
$106.92
$107.59
$100.32
Kaolin
$108.38
$116.31
$117.09
$119.83
$110.52
$114.42
Fire Clay
$25.05
$25.44
$21.95
$21.19
$14.56
$21.64
Bentonite
$35.54
$41.34
$36.13
$35.83
$42.04
$38.17
Average Annual Growth Rates
1993-1997 2.3% 3.2% 3.9% 0.6% -11.7% 5.1%
Source: Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
Table 2-14 also shows that the value of these clays have generally increased over the
1993 to 1997 time period. Average annual growth rates range from a low of-11.7 percent for
fire clay to 5.1 percent for bentonite. The negative growth rate of the price of fire clay is
explained by its continual decline over the 1993 to 1997 time period. Its price only increased
once, and just slightly, from 1993 to 1994. The average annual growth rate of the price of
bentonite is the highest of the six clays, however a closer examination of the data in Table
2-39
-------
2-14 shows that its price seemed to increase and then decrease from year to year. In other
words, there was no general increasing trend in bentonite's value over this time period. The
average growth rate of kaolin's price was less than one percent. Also interesting to not is that
kaolin's price initially increased by 7 percent from 1993 to 1994 and continued to steadily
increase through 1996. However in 1997, its price fell by close to 12 percent. The prices of
the other clays seemed to show general increasing trends over the time period presented here.
3 ENGINEERING COST ANALYSIS
When clay minerals are processed, emissions of HF and HC1 are released from the
calciners. To control these emissions, EPA has developed emission standards for these HAPs
under the authority of Section 112 of the CAA. This section explains how the nationwide
estimate of compliance costs associated with the clay minerals processing NESHAP was
developed. Section 3.1 first provides a general explanation of the regulatory costs, while
Section 3.2 describes which facilities face positive compliance costs associated with this rule.
This section also presents the nationwide compliance cost estimate for the clay minerals
processing NESHAP.
3.1 Regulatory Costs Description
A facility may have to purchase and install two types of equipment to comply with
this NESHAP. First, they may have to purchase equipment to control the emissions they
release (if the equipment they currently operate does not meet the MACT floor), and then
additional equipment may have to be purchase for the monitoring, recordkeeping, and
recording (MRR) of emissions. Regardless of whether equipment is purchased for emissions
control or for MRR, three types of costs may be incurred when equipment is installed and
operated in a facility: capital costs, testing costs, and operating and maintenance (O&M)
costs. Capital costs are the lump-sum costs that are incurred when capital equipment is
purchased and installed. Testing costs are those costs incurred when measuring initial
performance of monitoring equipment. O&M costs are those costs associated with the
upkeep and operation of the capital equipment.
To estimate the annual burden of these costs on facilities, the lump-sum capital costs
associated with both the emission control and MRR and the lump-sum performance testing
costs are converted to streams of annualized costs. The total capital costs are generally
annualized using a 7 percent discount rate over the expected life of the capital equipment.
3-1
-------
Added to the annualized capital costs and annualized testing costs are the annual costs of
operating and maintaining the capital equipment. The costs faced by each facility affected by
the regulation are then summed to develop the nationwide compliance cost estimate
associated with the regulation.
3.2 Affected Facilities
The clay minerals processing facilities potentially impacted by this regulation are
those that are major sources of HAPs and those that operate calciners in clay minerals
processing plants. Of the 76 identified clay minerals processing facilities (described earlier in
Section 2.3.2), it is estimated that four will face positive compliance costs associated with
this proposed rule. The four facilities, three of which are owned by one company and the last
one by another, all possess and operate the necessary control equipment (i.e., wet scrubbers)
to meet the proposed standards. These facilities will, however, face costs related to the
installation and operation of monitoring, recordkeeping, and recording (MRR) equipment and
initial performance testing. The proposed monitoring requirements for calciners equipped
with wet scrubbers include MRR of the following scrubber parameters:
pH of the scrubber liquid effluent;
• liquid flow rate; and
pressure drop or fan amperage.
One of the four facilities already monitors scrubber liquid flow rate and fan amperage,
therefore the estimated costs for this facility excludes the costs associated with the MRR of
these parameters. The cost estimate faced by the other three facilities, which are all owned
by one company, was developed by including the cost" of monitoring all three parameters.
The cost estimates associated with this NESHAP are presented in Table 3-1. The
total nationwide costs are the sum of the costs across all four clay minerals processing
facilities, and as the table shows, the total annual costs associated with this regulation is equal
to $65,085 (baseline year 2000). This total annual cost is made up exclusively of MRR and
initial testing costs, since the potentially affected clay minerals processing facilities operate
the necessary emission control equipment to meet the proposed standards.
3-2
-------
Table 3.1. Monitoring, Recordkeeping, and Recording Costs for Clay Minerals
Processing Facilities
Number of Total
Facilities Capital a
3 $5,716
1 $4,949
Nationwide
Total $22,097
Notes: a Total capital cost is the sum
Annualized
Capital1"
$812
$703
$1,515
of the costs of two
Annualized Annual
Testing O&M
$3,400 $12,098
$3,400 $12,052
$13,400 $48,346
Total Annual
MRR Costs
$16,310
$16,155
$65,085
pieces of equipment: one for emissions monitoring anc
the other for recordkeeping and reporting.
b Annualized capital cost is the sum of annual capital costs associated with monitoring equipment and
the annual capital costs associated with recordkeeping and recording equipment. The lifetimes of these
equipment may not be the same.
Source: U.S. Environmental Protection Agency. 2001. Memorandum from Midwest Research Institute to
Steve Shedd, Emissions Standards Division, Office of Air Quality Planning and Standards, "Facility-
specific Costs and Environmental Impacts for Use in the Economic Analyses for the Clay Minerals
Processing NESHAP," February 2.
4 ECONOMIC IMPACT ANALYSIS
In the economic impact analysis, the Agency typically examines how facilities will
directly (through the imposition of compliance costs) or indirectly (through a change in
market prices) affect the entire U.S. industry. Generally speaking, the implementation of a
proposed rule will increase the costs of production at affected plants. These costs will vary
across facilities depending on their physical characteristics, baseline controls, and the
regulatory standards that are set. The response by producers to these additional costs
determine the economic impacts of the regulation. Specifically, the cost of the regulation
may induce some owners to change their current operating rates or to close their operations.
These choices affected, and in turn are affected by, the market prices for the products
manufactured or processed by the affected facilities.
Typically, our economic analyses take several data elements to input to a model that
determines changes in market prices, output, and total social cost (via the change in producer
and consumer surplus). However, the impacts of this rule are not likely to produce any
4-1,
-------
measurable changes in an economic model of the clay minerals processing industry because
only 4 facilities out 76 are estimated to face costs associated only with MRR activities and
the nationwide total compliance cost represents an almost infinitesimal share of total market
revenues.
We can conclude in general that because a model of the market is not likely to show
any changes resulting from the costs imposed by this regulation, the market as a whole will
not show adjustments in price and production and affected producers will not be able to
recover any of the compliance costs incurred by raising prices. Likewise, while production
levels at some of the affected facilities may lower due to the increase in cost of production,
other facilities will compensate for this change such that overall industry production will not
change.
Rather than perform a full market analysis, the analysis takes a closer look at the
firm-level impacts if we assume all costs will be absorbed by the owner of the clay mineral
processing facility. We do this by determining the percentage of revenues that the
compliance cost will consume. Using data collected from one of the sources listed in Section
2.3.2, we found that the four affected facilities are owned by 2 ultimate parent firms and we
were able to obtain revenue and employment data for both of these firms. Table 4-1 presents
the companies, number of facilities, total annual costs, annual sales, and calculated share of
costs to revenues for these firms. As shown, the compliance costs as a percentage of firm
revenues for both firms are less than 0.01 percent. The impacts presented by this rule are
likely to be minimal on the two firms owning the affected facilities.
Table 4-1. Company Compliance Costs, Annual Sales, and Cost-to-Sales Ratios: 2000
Company
ID
A
Ba
Number of
Facilities
3
1
Compliance
Costs
$48,930
$16,155
Annual Sales
($106)
$509.8
$602.4
Cost-to-Sales
Ratio (%)
<.01%
<.01%
Notes: ' Annual sales for Company B are for 1997, the most recent publicly available data.
4-2
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5 SMALL BUSINESS ANALYSIS
This regulatory action will potentially affect the economic welfare of the owners of
clay mineral processing facilities. The ownership of these facilities ultimately falls on private
individuals who may be owner/operators that directly conduct the business of the firms, or
more commonly, on investors or stockholders that employ others to conduct the business of
the firm on their behalf (i.e., privately or public corporations). The individuals that manage
these facilities have the capacity to conduct business transactions and make business
decisions that affect the facility. The legal and financial responsibility for compliance with
the regulation ultimately rests with the facility managers; however, the owners must bear the
financial consequence of the decisions. Environmental regulations like this rule potentially
affect all businesses, large and small, but small businesses may have special problems in
complying with federal regulations.
The Regulatory Flexibility Act (RFA) of 1980 requires that special consideration be
given to small entities affected by federal regulation. The RFA was amended in 1996 by the
Small Business Regulatory Enforcement Fairness Act (SBREFA) to strengthen the RFA's
analytical and procedural requirements. The RFA and SBREFA require the preparation of a
regulatory flexibility analysis for any rule that would have a significant impact on a
substantial number of small entities, or a disproportionate impact on small entities.
This section identifies the businesses that will be affected by this rule and provides a
preliminary screening-level analysis to assist in determining whether the rule is likely to
impose a significant or disproportionate burden on small entities and whether a regulatory
flexibility analysis is required under the RFA. The screening-level analysis employed here is
a "sales test," which computes the annualized compliance costs as a share of sales for each
company.
These companies can also be grouped into small and large categories using Small
Business Administration (SBA) general size standard definitions for NAICS codes. The SBA
defines a small business in terms of the employment or annual sales of the owning entity.
These thresholds vary by industry and are evaluated based on the industry classification
(NAICS codes) of the impacted facilities. For the NAICS codes representing the companies
owning clay minerals processing facilities, the small business definition ranges fromlOO to
500 employees or $5 million in annual sales. Based on the SBA definitions, the Agency
identified 16 of the companies as small (47.1 percent) and 17 as large (50.0 percent) (See
5-1
-------
Appendix A for a detailed listing). Data for one company was unavailable, and therefore no
size determination could be made.
Only two companies own facilities with positive costs of compliance and both of
these companies are considered large based on SBA small size standards. The cost-to-sales
ratios for these firms are less than 0.01 percent. Based on this information, we conclude that
there will no impact on small entities from this NESHAP.
5-2
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6 REFERENCES
Dun and Bradstreet. 1999. Canadian Market Identifiers Electronic Database.
Dun and Bradstreet. 1999. Dun's Market Identifiers Electronic Database.
Dun and Bradstreet. 1999. Dun's Financial Record Plus Electronic Database.
Hoover's Online. 2001. Hoover's Company Profiles Online.
Kompass International. 1999. Kompass USA Electronic Database.
McCartan, Lucy. 1998. "Talc and Pyrophyllite," In: Minerals Yearbook, Metals and
Minerals. U.S. Geological Survey, U.S. Government Printing Office.
U.S. Department of Commerce, Bureau of the Census. 1999. 1997 Economic
Census, Manufacturing Industry Series, "Ground or Treated Mineral and Earth
Manufacturing."
U.S. Department of Commerce, Bureau of the Census. 1999. 1997 Census of Mining
Industry Series, "Clay and Ceramic and Refractory Minerals Mining."
U.S. Department of Commerce, Bureau of the Census. 1999. 1997 Census of Mining
Industry Series, "Kaolin and Ball Clay Mining."
U.S. Department of Commerce, Bureau of the Census. 2000. 1992 Concentration Ratios in
Manufacturing. U.S. Government Printing Office.
U.S. Environmental Protection Agency. 1999. Memorandum from Midwest
Research Institute to Jeff Telander, Emissions Standards Division, Office of Air
Quality Planning and Standards, "Preliminary Industry Characterization Data
Inputs for ISEG, Clay Minerals Processing Facilities," Sept. 21.
U.S. Environmental Protection Agency. 2001. Memorandum from Midwest Research
Institute to Steve Shedd, Emissions Standards Division, Office of Air Quality
Planning and Standards, "Facility-specific Costs and Environmental Impacts for
Use in the Economic Analyses for the Clay Minerals Processing NESHAP," Feb 2.
6-1
-------
U.S. Environmental Protection Agency. 1998. Fibers Use and Substitute Analysis.
Office of Pollution Prevention and Toxics, Economic and Policy Analysis Branch.
U.S. Environmental Protection Agency. 1995. Emission Factor Documentation for
AP-42 Section 11.25, "Clay Processing: Final Report."
Securities and Exchange Commission's 10-K Company Reports. 1999.
Standard and Poors Register-Corporate. Standard & Poors Corp., 1999.
Virta, Robert. 1999. "Clays," In: Minerals Yearbook, Metals and Minerals 1997: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
Virta, Robert. 1998. "Clays," In: Minerals Yearbook, Metals and Minerals 1996: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
Virta, Robert. 1997. "Clays," In: Minerals Yearbook, Metals and Minerals 1995: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
Virta, Robert. 1996. "Clays," In: Minerals Yearbook, Metals and Minerals 1994: Volume 1.
U.S. Geological Survey. U.S. Government Printing Office.
6-2
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APPENDIX A: SUMMARY CLAY MINERALS
PROCESSING COMPANY DATA
Table A-1. Summary Data for Companies Operating Clay Minerals Processing
Facilities
Company IName
Amcol International Corp.
BMI France
Burgess Pigment Co., Inc.
C-E Minerals, Inc.
Christy Refactories Company LLC
Clorox Co., Inc.
Engelhard Corp.
Franklin Industries, Inc.
GEO Drilling Fluids, Inc.
Global Industrial Technologies, Inc.
H.C. Spinks Clay Co., Inc.
Hecla Mining Co., Inc.
Imerys
ITC
J.M. Huber Corp.
Justin Industries
Kyanite Mining Corp.
Laporte, Inc.
facilities
6
1
1
3
1
3
6.5
1
2
4
2
6
3.5
0.5
3.5
3
1
1
Employees
NR
75
NR
NR
NR
NR
NR
350
NR
4,262
NR
NR
11,948
NA
NR
3,826
NR
NR
Sales (3>1U")
NR
113.7
NR
NR
NR
NR
NR
40
NR
602.4
NR
NR
2,632.90
NA
NR
509.8
NR
NR
Small business
N
Y
Y
Y
Y
N
N
N
Y
N
Y
N
N
N
N
Y
N
A-1
-------
Company IName
MFM Delaware, Inc.
Morganite North America, Inc.
Mud Brothers, Inc.
National Refractories Holding Co.
North American Refractories Co., Inc.
Oil Dri Corp.
Old Hickory Clay Co., Inc.
Resco Products Co., Inc.
Rovin Ceramics, Inc.
Standard Industrial Minerals, Inc.
Sud-Chemie North America, Inc.
Thiele Kaolin Co., Inc.
United Clays, Inc.
Wilkinson Kaolin Associates Ltd.
Wyo-Ben, Inc.
Zemex Corp.
Total
facilities
1
1
1
1
2
3
2
1
1
1
2
2
4
1
3
1
76
Employees
NR
NR
NR
NR
NR
705
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
55,875
Sales ($10 J
NR
NR
NR
NR
NR
160.3
NR
NR
NR
NR
NR
NR
NR
NR
NR
NR
$14,390
Small .Business
Y
N
Y
N
N
N
Y
Y
Y
Y
N
N
Y
Y
Y
N
16
Note: NR means Not Reported. Employment and sales data from Dun & Bradstreet are considered
proprietary and are therefore not reported in Table A-l. Data from publicly available sources are,
however, presented here. All of the data, reported and unreported, were used to develop the
economic impact analysis.
Data presented in this table are generally for the years 1997 and 1998, the latest information available
at the time the data were collected. However, more recent data were retrieved for Imerys (1999),
Justin Industries (1999), and Oil Dri Corp. (2000).
Englehard Corp. and ITC own a facility together in a joint venture, as do Imerys and J.M. Huber Corp.
For this reason, these corporations are listed as owning 0.5 of these jointly owned facilities.
A-2
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TECHNICAL REPORT DATA
(Please read Instructions on reverse before completing)
1. REPORT NO.
EPA-452/R-01-007
3. RECIPIENT'S ACCESSION NO.
4. TITLE AND SUBTITLE
Economic Impact Analysis for the Proposed Clay Minerals
Processing NESHAP
5. REPORT DATE
May 2001
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Air Quality Strategies and Standards Division
Research Triangle Park, NC 27711
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
12. SPONSORING AGENCY NAME AND ADDRESS
Director
Office of Air Quality Planning and Standards
Office of Air and Radiation
U.S. Environmental Protection Agency
Research Triangle Park, NC 27711
13. TYPE OF REPORT AND PERIOD COVERED
Final report
14. SPONSORING AGENCY CODE
EPA/200/04
15. SUPPLEMENTARY NOTES
16. ABSTRACT
Pursuant to Section 112 of the Clean Air Act, the U.S. Environmental Protection Agency (EPA) is developing a National
Emissions Standard for Hazardous Air Pollutants (NESHAP) to control emissions released from the domestic processing of clay
minerals. In the baseline year of analysis (1997), 34 companies owned and operated 76 facilities that produce process clay
minerals. EPA estimated that four of these facilities owned by two parent companies will incur costs associated with this
proposed rule. These four facilities all possess and operate the necessary control equipment (wet scrubbers), but they will face
costs related to the installation and operation of monitoring, recordkeeping, and reporting equipment.
The total annual costs of the rule are estimated to be $65 thousand. The costs are estimated to be less than 0.01 percent of
sales for both parent companies. No facilities are projected to close, and no change in employment is expected.
The economic impacts of this rule on small businesses is also examined pursuant to the Small Business Regulatory
Enforcement Fairness Act (SBREFA) and the Regulatory Flexibility Act. According to the Small Business Administration's
definition of a small business in the clay minerals processing source category, there are 16 companies identified as small and 17
as large. None of the facilities owned by the 16 small companies are expected to incur regulatory costs, hence there will be no
anticipated impact on small entities from this NESHAP.
17.
KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b. IDENTIFIERS/OPEN ENDED TERMS
c. COSATI Field/Group
air pollution control, environmental
regulation, clay minerals processing,
economic impact analysis
18. DISTRIBUTION STATEMENT
Release Unlimited
19. SECURITY CLASS (Report)
Unclassified
21. NO. OF PAGES
55
20. SECURITY CLASS (Page)
Unclassified
22. PRICE
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