The company is drowning in debt, and the state has resumed actions to revoke its decades-old lease.
US Magnesium’s production plant has been mothballed for years as it battles environmental regulatory actions, equipment failures, receding Great Salt Lake levels and litigation from the state of Utah, which is trying to revoke the lease that allows the company to operate.
Still, it has continued to pump a massive amount of water from the Great Salt Lake.
US Magnesium diverts water from the Great Salt Lake into solar evaporation ponds in Tooele County, where it concentrates the brine to extract magnesium chloride salt. Its Rowley plant then refined the salt into pure magnesium. The process produced corrosive waste and toxic emissions, which the company released into the air and stored on the ground — allegedly including on the state-owned lakebed — for decades.
The Division of Forestry, Fire and State Lands issued a letter on Aug. 15 demanding US Magnesium “cease and desist pumping/extracting water from the Great Salt Lake” since it said the facility is no longer “lawfully” extracting minerals.
Jamie Barnes, director of the division, shared the document with The Tribune Wednesday.
Barnes noted that US Magnesium still had rights to siphon water from the Great Salt Lake as long as it has an active lease.
“I don’t know if it’s still happening right as we speak,” Barnes said, “but ... we have asked them to quit.”
In an email, US Magnesium President Ron Thayer said the company was producing sodium chloride and magnesium chloride salts for other businesses that use the materials for road deicing and dust suppression.
“It is still unclear to the Company,” Thayer wrote, “as to why the media appears to be obsessed with US Magnesium’s lake water use.”
It has not pumped water from the lake, Thayer said, since mid-June.
How US Mag found itself underwater
Magnesium is a critical mineral used in everything from soda cans to to stadium bleachers to automobiles and airplanes. US Magnesium had long been the nation’s only major producer of primary magnesium metal, until equipment failure forced its plant to halt operations in September 2021, legal complaints show.
A series of disasters for the company ensued. In 2022, it attempted to extend its intake canals as the Great Salt Lake shrunk to an all-time low. The Utah Department of Environmental Quality denied that request after getting a deluge of public comments.
In 2023, DEQ fined the company $430,000 for more than a decade of environmental violations, although some claimed the punishment was too lenient.
Its problems compounded in 2024, when a contractor stopped building a retaining wall meant to block pollution from reaching the Great Salt Lake because US Magnesium couldn’t pay its bills. That put US Magnesium out of compliance with the U.S. Environmental Protection Agency.
US Magnesium had tried to pivot to lithium as an additional revenue stream by mining its waste piles, but the global market for the material took a nosedive. The company laid off 85% of its workforce soon after.
Then, late last year, the Utah Division of Forestry, Fire and State Lands moved to revoke US Magnesium’s 64-year-old lease.
(Trent Nelson | The Salt Lake Tribune) US Magnesium on Monday, June 24, 2024.
In a notice letter, the division alleged numerous violations:
- US Magnesium had illegally pledged its leased state lands to Wells Fargo as collateral for a loan.
- It allowed another company, Broken Arrow, to operate on its leased land and extract minerals without the state’s knowledge for an unknown period of time. Broken Arrow declined to comment for this story.
- US Magnesium also deliberately dumped hazardous material on the lakebed, the division asserted.
The division filed a lawsuit in Third District Court the same day, alleging the company had violated agreements with EPA as well, including failing to build a salt cap to contain pollution from an old waste pond and failing to retrofit its current pond.
In his email, Thayer said the company has maintained a relationship with Broken Arrow for more than 20 years, and that many of the products are sold to the State of Utah.
Regarding its waste stream, Thayer said US Magnesium has held a permit with the Utah Department of Environmental Quality for four decades.
In the years since US Magnesium found its plant in hot water, at least four businesses have sued for breach of contract and failing to deliver promised magnesium.
It now finds itself buried with more than $70 million in judgements and liens. That’s on top of nearly $475,000 it owes the state in unpaid mineral royalties.
Meanwhile, through it all, US Magnesium continues to siphon water from the Great Salt Lake.
According to the Department of Natural Resources, the company also has an agreement with Cargill Salt to deliver lake brine, since Cargill does not have water rights in the Great Salt Lake. But those deliveries only account for a small portion of the water US Magnesium is pumping.
Thayer asserted his company only accounted for 1.5% of total lake water depletions in recent years, far less than the water used by cities and agriculture.
“As such,” Thayer wrote, “we have very minimal impact to the lake level.”
The state and US Magnesium had entered into settlement discussions starting in January, but they apparently fell apart last month.
Thayer declined to comment on the ongoing litigation.
“It is unprofessional and discourteous,” he wrote. “Unfortunately, this integrity is not shared with all of the parties involved in these disputes.”
The company filed a status update with the district court Friday, asserting the division had told the judge US Magnesium was an imminent threat to the environment without proof.
“That was a false representation to this Court,” the company wrote in its filing, “and the passage of more than eight months since that allegation was made proves its falsity beyond any doubt.”
It further argued that a court-appointed receiver had found no environmental danger from the plant worth reporting, and that the division had not even bothered to consult with DEQ before filing its lawsuit.
DEQ declined to comment on the claims. The receiver, John Curtis of Rocky Mountain Advisory, LLC, did not respond to interview requests.
In a statement, the Division of Forestry, Fire and State Lands called US Magnesium’s court filing “inflammatory and misplaced.” It said it would demonstrate the importance of the receivership “in the near future.” It also pointed to an “extraordinary volume” of adverse judgements being filed against US Magnesium in other lawsuits.
The division filed its own status update Friday, informing the court it was working with EPA.
“It is evident,” the division wrote in its filing, “US Mag is not in compliance with its monitoring and/or reclamation obligations.”
In an interview when she provided the Aug. 15 letter resuming plans to revoke the lease, Barnes said the state remains apprehensive about when and how US Magnesium will clean up its polluted site, especially now that the company is underwater financially.
“That is a huge concern of mine,” Barnes said.
The division plans to hold an administrative hearing on canceling US Magnesium’s lease on Sept. 26.
