European Metal Recycling (EMR) has pleaded guilty to making members of the public scratch, cough, have a tight chest and suffer from eye irritation.
The industry heavyweight was charged at Hartlepool Magistrates Court this week with treating controlled waste in a manner likely to cause pollution, following an incident in June 2004 at its Thomlinson road site, Hartlepool.
Staff overloaded the site's fragmentiser with an insulating sheet made of rock wool.
The owner of a local warehouse described the dust from EMR's site as "a green light material that snowed down over the area".
He also described how his brother had been working outside when the plume of dust started to fall and that, although he had been feeling fine before, he ended up having to go home because of skin irritation that caused him to scratch.
Several others reported similar symptoms as well as eye irritation and tightness in the chest that caused difficulty breathing, which developed into a cough lasting the rest of the day.
In mitigation EMR said it had stopped the machine immediately when it realised there was dust blowing from the top of it and that it organised a clean up of the site the same day.
The following day it cleared the remaining dust and fragments of rock wool from the surrounding streets.
EMR was fined £5,000 and ordered to pay the Environment Agency, which brought the case, £842 costs.