BlueOak Arkansas, the electronics recycling plant in Osceola, developed a leak in its furnace in November 2015 that resulted in molten metal escaping and causing more than $10.5 million in damage.
BlueOak’s insurance carrier, Liberty Mutual Fire Insurance Co. of Boston, paid BlueOak’s claim but now is suing the companies that designed and manufactured the refractory lining materials for BlueOak’s furnace, RHI US Ltd. of Cincinnati and RHI AG of Vienna, Austria. Liberty wants to recoup from the RHI companies the money it paid BlueOak, according to the lawsuit filed in U.S. District Court in Jonesboro.
Liberty alleges that the companies were negligent and breached their contract.
The problem started at the $35 million recycling plant in November 2015 when the leak developed in BlueOak’s electric plasma furnace.
“The molten metal breakout destroyed the furnace and resulted in fire, heat, and smoke damage to the concrete slab foundation supporting the furnace,” the lawsuit said. It also ruined the electrical and filtration equipment.
RHI US didn’t immediately return a call for comment.
When the project broke ground in June 2014, BlueOak was touted as being the first U.S. urban mining refinery to recover high-value metals from electronic waste, such as computers and cellphones.
BlueOak Resources of Burlingame, California, said in June 2014 that it partnered with the Arkansas Teacher Retirement System and others to pay for the project, according to an Arkansas Economic Development Commission news release at the time. ATRS said it would invest up to $18 million in the project.
ATRS Director George Hopkins wasn’t immediately available for comment Thursday afternoon for a status update on the investment.