MAGMA COPPER COMPANY, A WHOLLY OWNED SUBSIDIARY OF NEWMONT MINING CORPORATION OWNS AND OPERATES THE SAN MANUEL SMELTER WHICH IS LOCATED NEXT TO THE TOWN OF SAN MANUEL, ARIZONA, LESS THAN FIFTY MILLS NORTHEAST OF TUCSON. THE SMELTER EMITS 188,340 TONS PER YEAR OF SULFUR DIOXIDE AND 2,000 TO 3,000 LBS/HR. OF PARTICULATE MATTER. ALTHOUGH PARTIALLY CONTROLLED THE EMISSIONS EXCEED APPLICABLE PM(100 LBS./HR) AND SO2 (80,045 TPY) EMISSIONS LIMITS.MAGMA HAS ALSO BEEN IN VIOLATIONS OF THE OPACITY SIP LIMITS, AND IS LISTED IN THE CDS AS A SIGNIFICANT VIOLATOR. MAGMA WANTS TO RECONSTRUCT THE SAN MANUEL SMELTER TO INCREASE CAPACITY AND TO COMPLY WITH ALL AIR POLLUTION LAWS. IT INTENDS TO BE IN COMPLIANCE BY NOVEMBER, 1988. HOWEVER MAGMA IS FINANCIALLY WEAK. IT HAS BEEN LOSING ABOUT $40 MILLION PER YEAR FOR THE LAST FIVE YEARS. IN ORDER TO FINANCE THE RECONSTRUCTION, WHICH WILL COST ABOUT $250 MILLION, MAGMA'S PARENT COMPANY, NEWMONT, WILL SPIN-OFF MAGMA AND RESTRUCTURE ITS INTERCORPORATE DEBT. MAGMA WILL THEN RAISE THE $250 MILLION NEEDED FOR RECONSTRUCTION OF THE SMELTER. IN ORDER TO GET THE LOANS NECESSARY FOR REFINANCING, MAGMA IS FORCED TO GUARANTEE TO LENDERS THAT IT CAN AND WILL COMPLY WITH ALL ENVIRONMENTAL LAWS. MAGMA HAS APPLIED TO THE STATE OF ARIZONA FOR A CLEAN AIR ACT SECTION 119, A SECOND ROUND NONFERROUS SMELTER ORDE