Schumer: Major Jamestown-Area Company Facing Trouble Because Feds are Slow-Walking Purchase of Critical Materials - Feds Must Eliminate Bureaucratic Delays that are Hurting Company and Nearly 250 Local Jobs

Press Release

Today, at RHI Monofrax, Senator Schumer called on the Department of Energy (DOE) to ensure the financial security of Jamestown's RHI Monofrax and expedite the purchase of materials that they produce for the federal government to clean up nuclear waste. RHI Monofrax, which employs nearly 250 people in Falconer, NY, is the sole approved producer of these materials worldwide and has a contract to provide the Department of Energy with $75 million worth of this product. However, in order to produce this product for DOE, RHI has to devote 20 percent of its production resources exclusively to this project, even though DOE only plans to order the product in small installments over the course of 25 years. As a result of this extended timeframe and limitation, the company's resources are tied up in this federal contract, which makes them less profitable and in turn makes it more difficult to maintain employment. Schumer therefore urged the Department of Energy to expedite their purchase of these critical materials, so that this Jamestown employer can have greater flexibility, and so that the Department of Energy has access to the products it needs.

"The federal government must do all it can to protect RHI Monofrax, a company that employs nearly 250 people in Chautauqua County and produces a one-of-a-kind product that is critical to containing hazardous nuclear waste. That is why I'm urging the Department of Energy to adopt a common sense procurement strategy when it comes to buying these materials," said Schumer. "The Department of Energy has announced a need to purchase $75 million in nuclear waste disposal materials that are only manufactured at RHI, but they currently plan on buying them in dribs and drabs over the next 25 years. This schedule must be sped up, so that RHI Monofrax can meet production demands and help with the disposal of nuclear waste across the country. If the Department of Energy fails to fast-track this procurement, Western New York could lose the ability to complete the order on time while nuclear cleanup sites are left with undisposed nuclear waste, and the Department of Energy could be left with a larger bill."

Schumer was joined by Daryl Clendenen, RHI Monofrax Jamestown Plant Manager; Chautauqua County Executive Greg Edwards; Jamestown Mayor Sam Teresi; Chautauqua County IDA Director Bill Daly; Vince DeJoy, City of Jamestown Director of Development; Dave Leathers, Jamestown BPU General Manager; Employees and union leaders from RHI Monofrax. In his letter to Secretary Steven Chu, Schumer noted that over the next 25 years the DOE will need to order roughly $75 million worth of glass contact materials (Monofrax K-3 and Monofrax E) from RHI Monofrax. RHI Monofrax has spent the past three decades researching and testing production methods to become the only approved glass contact refractory material supplier for all domestic nuclear vitrification processes supported by the DOE. Schumer stated that it's in the Department of Energy's best interest to expedite the purchase of this product, as it would provide greater stability for both DOE and RHI. Given that it took nearly thirty years for RHI to get certified to provide this product, it could take DOE decades to find another producer of this critical material if RHI were unable to remain open. Without RHI Monofrax it would be incredibly difficult for DOE to make progress on a number of nuclear clean-up sites across the country, including Hanford, Washington where cleanup efforts of the estimated 56 million gallons of radioactive nuclear waste stored at the facility are underway.

"The Department of Energy slow walking our contract has put RHI Monofrax in Falconer in a dangerous place," said RHI President Daryl Clendenen. "Senator Schumer's efforts to help us cut through the red tape come at a vital time for our company and our employees. With the Senator's help it is my hope that the Department of Energy heeds our call and makes this change, giving us greater flexibility and helping in the efforts to keep RHI open and operating in Chautauqua County."

"We have been working with RHI Monofrax for nine months on a very unique business situation where they are sole supplier to the Department of Energy for an important part of the vitrification process to contain nuclear waste," said Chautauqua County Executive Greg Edwards. "In a coordinated, intense effort with the County of Chautauqua Industrial Development Agency (CCIDA), we have reached out to our state and federal elected officials to help us in this matter. Once again, Senator Schumer is taking the time to visit a local facility, this time to have direct discussions with Daryl Clendenen, Plant Manager, and his staff at RHI Monofrax, LLC. In addition to his meeting, the Senator is advocating directly to the Department of Energy on behalf of one of our local companies. Having an outstanding partner like Senator Schumer greatly enhances our continuous economic development efforts."

"Changing the way the Department of Energy would order this specialized product from RHI Monofrax is a win-win situation for everyone," said Jamestown Mayor Sam Teresi. "The DOE would be assured to have the necessary tools it needs for the cleanup of a highly-volatile hazardous waste site, while Monofrax would be able to boost its production for a longer period of time following the fulfillment of their periodic contract. The change in the ordering process would provide greater stability for both the DOE's efforts and the company. I applaud Senator Schumer for his efforts on behalf of RHI Monofrax, which is one of the most significant industrial employers in the Greater Jamestown Region."

Due to the chemicals used in the process to produce the material DOE needs, RHI must devote one of its five kilns exclusively to the DOE project, even though at DOE's current ordering pace it only takes RHI a short time to produce all the product DOE needs for a year. This leaves RHI with the difficult choice to either allow the kiln to sit idle for the remainder of the year, or to pay for the expensive cleaning of the kiln, only to re-contaminate it the following year when DOE orders more of the product. If DOE were to expedite their order from RHI in larger installments, like Schumer is urging, it would allow RHI to repurpose the kiln currently dedicated to the DOE project to other projects for other customers, making RHI a more productive company and helping to keep them open and operating in Jamestown.

RHI Monofrax is the sole-approved provider of glass contact refractory material in the world and it is the only fusion cast refractory facility in the Americas. Schumer also highlighted in his letter to Sec. Chu that increasingly tough competition has had a significant impact on the refractory industry and that by keeping a furnace dedicated to producing DOE disposal materials, the Jamestown company will be unable to use that furnace for other customers, reducing sales and making the company less competitive in an already challenging market.

RHI Monofrax is critical to the Jamestown economy and employs over 8,100 employees world-wide. RHI was founded in 1839 and merged with Vesuvius Monofrax, in 2007. As of February 2, 2007, RHI Monofrax, Ltd. operates as a subsidiary of RHI AG, a globally traded company. RHI Monofrax produces materials that can withstand high temperatures used for vitrification -- the state of the art means of storing and disposing of nuclear waste, which essentially turns the waste into glass. In this state, the waste is immobilized and sealed away to prevent leaching, so that it can be safely stored and disposed of.

A copy of Sen. Schumer's letter appears below:

Dear Secretary Chu,

I write to urge you to expedite the procurement of the remaining fusion cast refractory materials necessary for the vitrification of nuclear waste at the Hanford Site in Washington State. The Department of Energy (DOE) has been slowing down orders for glass contact materials used in the vitrification process instead of speeding them up, leaving millions of gallons of nuclear waste untreated and putting hundreds of quality jobs in Western New York at risk.

Over the next twenty five years, the DOE will need to order roughly $75 million worth of glass contact materials (Monofrax K-3 and Monofrax E) from RHI Monofrax based in Jameston, NY. RHI Monofrax undertook extensive testing during the last 30 years to be approved as the glass contact refractory material supplier of choice for all domestic, nuclear vitrification processes done by the DOE. There is no other approved provider of this material in the world and it is the last remaining fusion cast refractory facility in the Americas. In order to continue providing these materials to the DOE, RHI Monofrax must keep one of their five furnaces dedicated specifically to this contract, keeping that furnace from being used for any other points of sale.

By having to keep a furnace dedicated to exclusively supplying DOE sites, it prevents RHI Monofrax from being able to use that furnace for other customers, reducing sales and making the company less competitive in an already challenging market.

I ask that you accelerate the Hanford melter procurement process to ensure that there is not a future supply interruption. Closure of RHI Monofrax, the only approved supplier of these materials critical to the vitrification of nuclear waste, would dramatically affect waste treatment efforts. Getting DOE approval to supply these materials takes over ten years and costs millions of dollars. Expediting the procurement process of Monofrax K-3 and Monofrax E for the Hanford would ensure that RHI Monofrax keep their facilities operating and ensure that critical efforts to treat our nuclear waste are not unnecessarily interrupted.

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