The Asset: Kaiser's former Eagle Mountain iron ore mine is located in the remote Eastern Riverside County desert, 150 miles east of the Los Angeles basin.

Strategy: Since 1988, Kaiser and its subsidiary, Mine Reclamation LLC ("MRC"), have been working to transform the former mine into a state-of-the-art, regional rail-haul municipal solid waste landfill that can meet significant demand for new, environmentally superior, solid waste disposal in Southern California.

Execution: Kaiser has successfully navigated the costly state's treacherous political and regulatory processes to complete the entitlement of the regional landfill capable of processing up to 20,000 tons per day. However, the landfill project is involved in litigation.

Result: In August 2000, MRC reached agreement to sell the Eagle Mountain Landfill to the Los Angeles County Sanitation Districts for $41 million. The agreement is subject to due diligence and the resolution of certain contingencies.

Status: In September 2005, Kaiser and MRC received an adverse U.S. District Court decision in the federal land exchange litigation that may materially impact the viability of the project. The decision was appealed to the U.S. 9th Circuit Court of Appeals. On November 10, 2009, the U.S. 9th Circuit Court of Appeals ruled against the completed federal land exchange. The panel majority rejected most of the project opponents’ arguments but ultimately affirmed the U.S. District Court’s ruling that the land exchange was not properly approved by the federal administrative agency. The third judge on the panel issued a 50-page dissent which is very critical of the majority’s opinion. The dissenting judge concluded that Kaiser and the federal agency fully complied with applicable federal law. A copy of the decision can be found with Kaiser’s 8-K filed with the Securities and Exchange Commission on November 12, 2009, which can be accessed through this website. Kaiser and MRC are seeking a rehearing or an en banc rehearing of the case by the 9th Circuit. If an en banc rehearing is granted, the appeal would be heard by an eleven-judge panel. There is no assurance that a rehearing or a rehearing en banc will be granted as such are discretionary with the U.S. 9th Circuit Court of Appeals.

The initial closing on the sale to Los Angeles County Sanitation District continues to be delayed. Even with an initial closing, MRC will not receive any proceeds from the sale until the outstanding litigation is resolved in favor of Kaiser and MRC. If we are not successful in our appeal of the adverse lower court decision, the decision would jeopardize the viability of the landfill project and its sale to the Los Angeles County Sanitation District.