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Superior Silica Denies Pollution Allegations


County officials in western Wisconsin have closed a frac sand mine for allegedly dumping polluted wastewater into a pond that was properly lined. Trempealeau County regulators shut down the Guza Pit near Independence this week for operating without a permit.

County zoning director Kevin Lien told the Minneapolis Star-Tribune that the silica sand mine could be fined. The county requires that certain polluted waters be dumped into a lined pond.

The 1,600-acre mine is run by the firm of Superior Silica Sands of Texas (SSS).

SSS responded that it believes that a stop work order from the Trempealeau County Department of Land Management with respect to SSS's future Independence dry plant facility was issued by the county in error. SSS engaged in grading and excavating activities in the area with the intent to construct a dry plant to begin operations in 2015. The reported violations related to mining activities are attributable to a different operator who is currently engaged in frac sand mining in the area.

SSS's Independence frac sand mining facility is not engaged in any mining activities at this time. The error in Trempealeau County's stop work order should not impact the current production process for SSS, and SSS is working with Trempealeau County to ensure the correct parties are subject to the stop work order.

Rick Shearer, president of SSS and chief executive officer of Emerge Energy Services LP, commented, “While we are disappointed with the reports that reflect the misunderstanding with the Trempealeau County Department of Land Management, Emerge Energy is still executing our growth plan. Our Thompson Hills mine and wet plant began operations last month and is already processing wet sand for our winter stockpile so that we can continue to supply our customers. Our dry plant at Arland, Wisconsin remains on schedule to start production this quarter. Further, we remain hopeful that our dry plant at Independence will start operations as early as the first or second quarter of 2015. Industry fundamentals remain strong, and we have been able to sign additional multi-year contracts since our last update in August. We now have 8.2 million tons under contract annually, with a weighted average remaining contract life of 4.2 years, which puts us well ahead of our contracting goals. We look forward to updating the investment community more in the coming weeks when we release our earnings.”