SALT LAKE CITY — The state of Utah is scrutinizing a mineral company, accusing it of unauthorized extractions of lithium from the Great Salt Lake.

Utah's Division of Forestry, Fire & State Lands confirmed it was investigating the situation with Compass Minerals at a hearing earlier this week before the Utah State Legislature's powerful Legislative Water Development Commission. FOX 13 News was at the meeting when the issue was raised.

Compass Minerals announced in 2021 it was seeking to extract lithium from the Great Salt Lake under a pilot program. The company, which has a plant in Ogden, said it was utilizing new methods of extracting the precious resource "within the ambient brine of the Great Salt Lake."

Lithium is increasingly in demand in an electrified world. It's used in battery storage and electric vehicles. Demand is growing exponentially. But the traditional extraction process also apparently requires a lot of water.

"It requires a significant amount of not only lake water, but drinking water as well, potable water in that production," Scott Paxman, the head of the Weber Basin Water Conservancy District and a member of the Legislative Water Development Commission, said in the meeting. " We’re struggling with the concept of furnishing that much water to one new industry that takes water away from the population, basically."

The state accuses Compass Minerals of going outside the boundaries of any existing agreements it has. New rules for environmental standards and royalty payments to the state of Utah have yet to be drafted.

"We understand they’ve engaged in a pilot process for a lithium development and that they’ve engaged in other agreements with regard to lithium," Jamie Barnes, the director of Utah's Division of Forestry, Fire & State Lands, told FOX 13 News. "That being said, they do not have a contract with the state or a royalty agreement for the extraction of lithium."

Asked if the pilot project Compass Minerals was engaged in was legal and authorized, Barnes replied: "That’s a disputed fact that we’re trying to get the bottom of."

Some lawmakers did not appear to be pleased to hear the news. Commission chair Rep. Casey Snider, R-Paradise, sponsored a bill that raised royalty payments and set environmental standards for mineral extraction in an effort to protect the Great Salt Lake. He noted there is no lease agreement with the state to mine lithium and asked what the state planned to do about it.

"Because I'm making the assumption that if they thought they could provide the lithium, that they’ve already undertaken some sort of test which would extract from the Great Salt Lake lithium to prove proof of concept," Rep. Snider, who also co-chairs the legislature's Great Salt Lake caucus, said. "Has that occurred and what do we have to address that if that’s occurred outside of statute?"

"We are currently working with our legal counsel to determine what can be done," Barnes replied.

Compass Minerals very much disputed the state's position on its activities on the Great Salt Lake in a statement responding to FOX 13 News' inquiries on the matter.

"Compass Minerals publicly announced on July 13, 2021 that our company was undertaking a strategic resource assessment in pursuit of developing a sustainable lithium resource as a co-product of our existing mineral production on the Great Salt Lake and under our existing mineral and water rights. In that same announcement, we advised that we were undertaking ongoing pilot projects with our produced brine to test various direct lithium extraction (DLE) technologies," the company said.

"We have been extremely transparent throughout this process as our assessment progressed, including through numerous public announcements and direct communication with the Utah Division of Forestry, Fire and State Lands (FFSL). We were therefore surprised and disappointed to hear FFSL testimony at the recent Water Development Commission hearing inferring that our actions to date have been anything other than transparent, exploratory and collaborative."

Compass Minerals' CEO sent a letter to the commission on Friday insisting it is within its rights to extract lithium, noting it holds 10 leases granted by the state and asking for a dialogue.

"In our more than a half-century of operating on the Great Salt Lake, our company has always prioritized responsible operations, working hand-in-hand with the State of Utah and numerous other stakeholders on the lake to create significant economic value while ensuring a healthy lake environment," CEO Kevin Crutchfield wrote in the letter shared with FOX 13 News, adding: "We look forward to engaging in continued meaningful and professional discussions with FFSL and other interested leaders like this Commission concerning the opportunity that lithium development presents for the State and the many considerations that will help govern it."

Compass Minerals' methods for extracting lithium earned a $252 million investment from Koch Industries earlier this year. Last year, the Securities and Exchange fined Compass Minerals $12 million and accused the company of misleading investors about a technology upgrade it claimed would reduce costs at a mine in Brazil but actually increased costs.

Barnes told the Legislative Water Development Commission that while they don't want to scare innovation and development away, protecting the Great Salt Lake is their main priority right now. The lake hit its lowest point in recorded history last year and state leaders are worried about an ecological crisis with aresenic-laced dust storms (another naturally occurring mineral in the lake), reduced snowpack and harms to public health and wildlife. Political leaders have passed a series of water conservation bills and spent hundreds of millions of dollars in efforts to help reverse the lake's declines.

Brian Steed, the newly-appointed Great Salt Lake Commissioner who is tasked by the state legislature and governor with coming up with plans to save the lake, told FOX 13 News he shared the Division of Forestry, Fire & State Lands' concerns.

"Minerals have been a great thing for us and, quite candidly, we need the lithium. We as a society have made the determination that we’re going to go to a more electrified world and that electrification world is going to require more resources like lithium," he said. "That being said, we can’t have that lithium extraction at the expense of the lake."

Lynn de Freitas, the director of the environmental group Friends of Great Salt Lake, said she supported the state scrutinizing Compass Minerals' actions.

"Yes, EV being in the 21st century with the electrical needs and so forth. But nonetheless the resource needs to be considered and protected," she said, referring to the Great Salt Lake.

Fox 13 Reporter
Ben Winslow is FOX 13's reporter on Capitol Hill covering a wide variety of topics including politics, polygamy, vice and courts. He has been in the news business in Utah for more than 20 years now, working in radio, newspaper, television and digital news. Winslow has received numerous honors for his reporting, including a national Edward R. Murrow award; the Religion Newswriters Association Local TV News Report of the Year; the Utah Broadcaster's Association and the Society of Professional Journalists. Readers of Salt Lake City Weekly and Q Salt Lake have named him their "Best TV news reporter" for many years now. He co-hosts "Utah Booze News: An Alcohol Policy Podcast," covering the state's often confusing and quirky liquor laws. Winslow is also known for his very active Twitter account keeping Utahns up-to-date on important news.

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