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prepare an environmental impact statement detailing the environmental impacts of “major Federal
actions significantly affecting the quality of the human environment.” The U.S. Environmental
Protection Agency will, and other federal agencies and any interested third parties can, review and
comment on the scope of the EIS and the adequacy of and findings set forth in the draft and final EIS.
As required, we began in 2012 to undertake the NEPA process for the Bear Lodge REE Project. The
NEPA process can cause delays in issuance of required permits or result in changes to a project to
mitigate potential environmental impacts, which in turn can impact the economic feasibility of a
proposed project, including the ability to construct or operate the Bear Lodge REE Project or other
properties entirely.
The NRC, pursuant to its authority under the Atomic Energy Act, oversees the regulatory framework
governing the control of radioactive materials, including mining, beneficiation and processing of rare
earth elements that contain radioactive source materials such as uranium and thorium. The NRC is
responsible for issuing licenses for source material involving concentrations of uranium or thorium that
exceed 0.05% by weight. If a proposed action, including waste generation, results in materials with
concentrations of uranium and thorium that equal or exceed 0.05% by weight, a license to receive title
to, possess, use, transfer, or deliver source and byproduct materials may be required. We are required
to follow the regulations pertaining to a license application for the Bear Lodge REE Project. The
licensing process, including NEPA review relating to the NRC licensing, may cause delays or result in
changes to the Project design to mitigate impacts as required under the licensing issuance.
Under CERCLA and similar state laws, responsibility for the entire cost of cleanup of a contaminated
site, as well as natural resource damages, can be imposed upon current or former site owners or
operators, or upon any party who released one or more designated “hazardous substances” at the site,
regardless of the lawfulness of the original activities that led to the contamination. CERCLA also
authorizes the EPA and, in some cases, third parties to take actions in response to threats to public
health or the environment and to seek to recover from the potentially responsible parties the costs of
such action. We may also be an owner or operator of facilities at which hazardous substances have
been released by previous owners or operators. We may be responsible under CERCLA for all or part
of the costs of cleaning up facilities at which such substances have been released and for natural
resource damages. We have not, to our knowledge, been identified as a potentially responsible party
under CERCLA, nor are we aware of any prior owners or operators of our properties that have been so
identified with respect to their ownership or operation of those properties.
The Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes,
govern the disposal of “solid” and “hazardous” waste and authorize the imposition of substantial fines
and penalties for noncompliance, as well as requirements for corrective actions. Although certain
mining, beneficiation, and mineral processing wastes currently are exempt from regulation as
hazardous wastes under RCRA, the EPA has limited the disposal options for certain wastes designated
as hazardous wastes under RCRA. It is possible that certain wastes generated by our potential future
operations that currently are exempt from regulation as hazardous wastes may in the future be
designated as hazardous wastes, and may therefore become subject to more rigorous and costly
management, disposal and clean-up requirements.
The Clean Air Act, as amended (“CAA”), and comparable state statutes, restricts the emission of air
pollutants from many stationary and mobile sources, including mining, beneficiation, and processing
activities. Our planned mining operations may produce air emissions, including fugitive dust and other
air pollutants, from stationary equipment, storage facilities, and the use of mobile sources such as
trucks and heavy construction equipment that are subject to review, monitoring, control requirements
and emission limits under the CAA and state air quality laws. New facilities may be required to obtain
permits before work can begin, and existing facilities may be required to incur capital costs to remain
in compliance. In addition, permitting rules and issued permits may impose limitations on production
levels or result in additional capital expenditures to comply with such rules or permits. In certain
circumstances, private citizens may also sue sources of pollutants for alleged violations of the CAA.
The Clean Water Act (“CWA”) and comparable state statutes impose restrictions and controls on the
discharge of pollutants into waters of the United States. These controls generally have become more
stringent over time, and it is possible that additional restrictions will be imposed in the future.
Violation of the CWA and similar state regulatory programs can result in civil, criminal and
administrative penalties for unauthorized discharges of hazardous substances and other pollutants.