ThyssenKrupp's Brazilian steel mill has been fined 10.5 million reais ($5.17 million) for air pollution violations, Rio de Janeiro-state's environment secretary said on Thursday.
The pollution has been a recurring problem that could lead to suspension of the plant's operations, the state warned.
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The Cia. Siderurgica do Atlantico (CSA) mill was fined for the emission of "silver rain," or clouds of silvery particles caused by slag, the secretary, Carlos Minc, said. Slag, a steel-making byproduct, is used to remove impurities from iron ore and help balance the chemical composition of steel.
The particles in silver rain can cause respiratory and skin problems.
Controlled by Germany's ThyssenKrupp AG , the money-losing 5.2 billion euro ($6.71 billion) mill has been fined for similar emissions before. ThyssenKrupp is now trying to sell its 73 percent stake.
"My patience with CSA has definitively ended," Minc said. "This is not their first mess-up. They are getting a yellow card, a warning. The next step is suspension."
ThyssenKrupp put the CSA mill up for sale in May by first offering it to Rio de Janeiro mining company Vale SA . Vale, the world's largest iron ore producer, owns 27 percent of CSA.
After Vale declined, other companies offered bids. ThyssenKrupp has said the bids were too low.
In addition to CSA, which makes slabs out of Vale's Brazilian iron ore, ThyssenKrupp is also offering to sell its steel-slab rolling mill in the U.S. state of Alabama.
Less than three years old, CSA was designed to have state-of-the-art pollution-control equipment. Instead, it has been plagued by system malfunctions, poor construction, repeated pollution complaints and excess emissions.
In May it signed an accord with Rio de Janeiro state officials promising to improve its environmental performance and was fined 14 million reais.
CSA has the right to appeal the latest fine.
($1 = 2.03 Brazilian reais)
($1 = 0.77 euros)
(Reporting by Rodrigo Viga Gaier.; Additional reporting by Jeb Blount.; Writing by Jeb Blount; editing by Jim Marshall)